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After a first meeting at DIA Amsterdam in June 2019, I had the opportunity to see Christophe Soulard, business developer for Grohe, the famous brand of taps. The work they are currently doing, and the announcements they have just made to DIA Munich, prove that startups are not the only ones to invest the field of innovation! Let’s see how Grohe plans to revolutionize water leaks claims.
Value proposal of Grohe against water leaks claims
Like Ubios in Canada, Grohe offers a valve to install on the water supply of a single house. This detects water leakage, micro-leakage or abnormal consumption behavior. In this case, the valve closes, which stops the water supply of the system and therefore by definition, considerably limits the damage of the water leaks claims and their cost. Clearly it is a water security system for the house for home insurers. It is then a question of covering all the damages of the sanitary waters, one of the first posts of claims, in volume, for the insurers.
A solution for everyone?
Such a solution represents a certain cost to the installation (public price of the valve = 600 €!). Thus, the economic model to be mounted must take into account different parameters! To start, a fundamental question: who pays what, between the insurer and the customer? More specifically, should this type of solution be used for all insureds?
Grohe offers two potentially complementary distribution strategies.
First, a so-called repetitive model. When an insured has had a first water leak damage, the probability of another one will increase. For the insurer, the traditional solution is to end the policy. This is where Grohe’s proposal against water leaks claims comes in. By installing this type of valve, the insurer protects itself from future inconvenience. At the same time, it improves customer satisfaction that is also protected!
The other model is a preventive model. This is to install this type of solution for all insured. However, the cost to expect can be high. It is then possible to prioritize by the amount of the premium and thus the risk potentially avoided in order to guarantee a faster return on investment.
Jinnbee can assist you in defining such a business case and consider with you the best opportunities! Contact us!
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Grohe offers its solution to insurers. The idea is that the insurer chooses which insured he wants to install this type of valve. Then he gets the agreement of his insured. Finally, it mandates Grohe and its partners for a turnkey installation.
Upon activation, the valve is connected to the partner insurer. This allows data to be made available in a remotely accessible dashboard.
The cost is supported by the insurer. However, the experience gained by Grohe proves a real return on investment and short or medium term in the two models presented!
Innovation in the innovation: the result is guaranteed
The announcement made to DIA Munich concerns a partnership with MunichRe. They offer together with some insurers (a handful) a guarantee of success of the business case. Thus, if the return on investment is expected after 3 years, and that is not the case, MunichRe supports the difference! That’s to say if they are confident in the solution.
Note: According to me, it’s one of the first such offer in the world.
On Grohe side, this experience in the form of intra-tech is already a success. Deployed in particular with the Finnish insurer LähiTapiola, there are already 5000 customer installations in 2019, and a target of 108,000 in 2026.
The goal for insurers can be threefold:
- Guarantee a very strong customer satisfaction with a promise of an end to water damage!
- Improve its retention and therefore reduce the turnover of its portfolio
- To have a competitive advantage vis-à-vis the competition in a saturated market.
However, a second subject may be considered. Via the data connection, the insurer has access to data about the incident. He can therefore know if the water damage is related to frost, water hammer or any other reason. He may even know that there is a micro-leak before the insured knows it. Imagine the outgoing call to your insured to indicate that there is a problem at home, but that everything is under control and that someone will spend the day to settle it!
Finally, it is the possibility of being a business provider for other products or partners who will intervene at home (such as remote monitoring platforms for example).
To go further
If you want more information, I invite you to consult the following resources:
- Website dedicated to the project : insurer.grohe.com
- Linkedin page Grohe Sense
- Finally, watch the video of the experience LähiTapiola in Finland
Jinnbee published this summer a comprehensive study of insurtechs dedicated to claims management and their 90 usecases: let’s talk about it!