Technology waves wand over commercial, sectional-title insurance

Technologies like central management systems allow for more effective insurance claims cost control.

Talk about how the insurance industry is using technology to transform itself, and the conversation invariably turns to AI, data analytics, and even smart bots that can make the customer experience quicker and easier. 

When it comes to commercial and sectional title insurance, though, the real sweet spot of technology isn’t making claims easier: it’s finding ways to extend the useful life of assets and improve return on investment. 

Attaching sensors to factory machinery, earthmoving equipment, transformers, elevators and even geysers isn’t the most glamorous use of technology. But it’s already starting to fundamentally change the way major assets are insured. 

Being able to monitor the health, location and performance of assets at all times enables a couple of things. The first is predictive maintenance, with connected systems becoming able to detect impending issues before they become problems. Being able to manage risks proactively saves asset owners and insurers huge amounts of time and money. 

The second is the ability to determine the usage of assets exactly, which gives insurers the ability to create more accurate risk profiles – which often means lower premiums. 

Until now, one of the bugbears of commercial and sectional title insurance has been a lack of updated information and transparency around assets. By using central management systems that track the use and condition of their assets, asset and property managers can collect real-time data from their operations, implement robust maintenance plans, and run their buildings and assets more efficiently and effectively.

The sectional title sector is well ahead of its commercial counterpart in this regard. That’s partly because under the Sectional Titles Schemes Management Act, insurance cover is a legal requirement for all community schemes. 

This is where things start getting proactive. With building compliance being top-of-mind for owners, insurers are working closely with bodies corporate to determine the remaining useful life of their critical assets, produce a legally-compliant 10-year maintenance, repair and replacement plan (MRRP), and provide a risk and condition report on each asset.

Right now, we’re already seeing a growing number of sectional title developments, estates and retirement villages across South Africa saving time, money and headaches by using central management systems that include automated claims management functionality. These systems allow all claims to be logged electronically by owners and tenants, authorised instantly by insurers, and jobs scheduled immediately with approved service providers, with no human interaction.

Some of the immediate benefits that bodies corporate and managing agents are seeing include far more effective claims cost control, and shorter claims cycles and incident reporting lag times. And here’s why I like to use the example of a geyser when I’m talking to property developers and sectional title owners: Up to 65 percent of sectional title claims are geyser-related. Managing each case manually is a world of admin pain. 

The next evolution of urban living insurance will be to create ‘smart’ sectional title developments that are wired from the ground up to connect gadgets, utilities, residents, and management beyond claims alone. These smart townhouses and apartments will connect everything from aircon and access control to geysers and garden services, and allow them to be managed from a central point. This enables communication between people, devices and the network, and creates better living experiences for residents by incorporating services that save time, money, and hassle. 

This integration is already resulting in profound changes in how we operate and interact with the value chain. Multiple stakeholders – owners, trustees, brokers, managing agents and suppliers – are all connected to a central system, where they interact with one another and create and exchange value. Everybody is on the same page, all the time. It’s already here and happening in the sectional title industry – and it’s coming soon to the commercial insurance arena too. Watch this space.