|LähiTapiola and GROHE are making water security systems more proactive |
With leaking pipes, washing machines, and boilers as well as flooded cellars, water can cause substantial damage to a home and generates ever-increasing payouts by insurers. In Finland, LähiTapiola refuses to accept this inconvenient truth by introducing GROHE’s proactive water security system to their policyholders. In a large-scale roll-out, the partners install the GROHE Sense water security system in the homes of thousands of selected customers. Together, the two partners presented the project at the Digital Insurance Agenda (DIA) in Amsterdam this year, the largest InsurTech event in Europe.
“The company is set for a fundamental transformation of the insurance sector, acting proactively to prevent damage before it turns into a cost factor in the first place. This first-of-a-kind collaboration will reduce water damage payouts by 50 per cent by 2025 and help us keep our top line,” said Anu Koskenvuo, director, LähiTapiola.
“It’s a perfect match. The company works hand-in-hand with LähiTapiola for residential water security, applying an innovative concept: proactive water security. GROHE offers an end-to-end solution for eliminating the biggest cost driver of the home insurance sector: water damage. This solution is a significant game-changer for the home insurance business,” says Bert Depiere, director digital innovations, GROHE AG. “Together with LähiTapiola, GROHE has established a blueprint for mass-scale roll-outs of water security systems, limiting the risks for insurers. Its solution includes innovative services like training, installation, and data services,” said Bert Depiere.
The roll-out of GROHE’s sense systems to LähiTapiola customers’ homes will run for several years. Installations will be expanded gradually over this year with a scheduled scaling to over 100,000 LähiTapiola customers’ homes by 2026. With this move, home insurance is going to radically change, potentially offering a completely new promise of proactivity to the consumer.
|LähiTapiola and GROHE are rethinking water damage insurance at DIA Amsterdam |
Preventing damage, lessening costs
Although water damage is the biggest risk to homes and causes more damage than fires or severe weather, only 3 per cent of all European households are equipped with a system for protection against water damage. In Finland alone, almost 40,000 water damage cases are reported to insurance companies each year, resulting in more than €160 million ($179.38 million) that have to be paid to policyholders.
Both damages and claims have been increasing in the 21st century. The ageing housing stock and ageing pipelines lead to an increase in leakage damage. Lower costs, new materials, and the increased complexity of devices installed in the homes are further pushing the average claim value up. When damage costs increase, this also raises the annual amount of insurance compensation. On average in Europe, water damage costs approximately €2,300 ($2,580) per case – including detection, repair, and replacement of damaged items. But there is a gap of nearly €900 ($1,010) between that figure and the average amount reimbursed by insurance companies.
The installation of GROHE Sense and Sense Guard will reduce the number of claims and the claim size for water damage and insurers. It will bring them peace of mind. That is why GROHE now helps insurers in implementing the product in a complete solution. Since having Sense and Sense Guard on the market for a year and a half now, GROHE – a traditional sanitary manufacturer – was already rated as one of the DIA Top 100 InsurTech companies in 2018.
GROHE is a leading global brand for full bathroom solutions and kitchen fittings and has a total of over 6,000 employees, 2,400 of which are based in Germany. GROHE has been part of the LIXIL Group Corporation since 2014. As an international brand, GROHE pursues the brand values of technology, quality, design, and sustainability, seeking to offer the “Pure Freude an Wasser”.
Regarding LIXIL, it makes pioneering water and housing products that solve every day, real-life challenges, making better homes a reality for everyone, everywhere. Drawing on our Japanese heritage, the company creates world-leading technology and innovate to make high-quality products that transform homes. Its approach comes to life through industry-leading brands, including INAX, GROHE, American Standard, and TOSTEM. Over 70,000 colleagues operating in more than 150 countries are proud to make products that touch the lives of more than a billion people every day.