News

Limiting the risk of Escape of Water

17/02/2012

Merlin Client & Customer Services Director, Alex Kilpatrick comments on Escape of Water claims for Insurance Times.

Escape of water (EoW) claims have pushed their way to the top of the insurance industry agenda over the past couple of years as they increase in cost, frequency and complexity. ABI figures from November 2011 put the cost to the industry at £2m a day.

Last winter saw unprecedented levels of EoW claims. Although claims levels to date this winter have remained lower, the Great British Weather – as experienced in the last two weeks – is proving it may still have some life in it yet. Last year’s surge caught many off guard and exposed weaknesses in the traditional process for handing EoW claims. While every surge situation is different and poses new challenges, what lessons were learnt and how can the industry be better prepared for future events?

An obvious solution to limiting the occurrence of EoW claims requires a change in building practices. Unlike many other countries, in the UK we have traditionally installed pipe work in uninsulated parts of buildings such as the loft. This, naturally, increases the risk of burst pipes in cold snaps.  However, preventative measures mean that increasingly pipes are being better located and insulated in new building and during renovation works. This, combined with growth in the use of plastic piping, should eventually lead to an overall fall in EoW claims longer term. In the meantime, however, what else can be done to protect those homeowners still at risk?

Merlin firmly believes that the key to limiting EoW claims is the education of policyholders on the simple yet effective measures they can take that have been proven to reduce the likelihood of a claim. Lagging pipes, ensuring heating is left on, or a system is dried down if properties are empty for extended periods, will all contribute to safeguarding property. Another possible area for insurers to consider is the promotion of water flow control devices that can help limit damage should a pipe burst. In the last six months, Merlin has worked with two leading insurer clients on campaigns to educate policyholders that it believes ultimately translates into cost savings for the insurers, builds reputation and adds value for policyholders.

In the event of high claims volumes, Merlin’s experience of last year’s winter surge highlighted the key factors required to limit the claims lifecycle and cost and ensure a positive policyholder experience. First, and foremost – communication. Clear and regular communication is essential to manage customer expectations and ensure clarity around the claim’s progress. Secondly – speed of response.  Delays in getting to policyholders increases the likelihood of secondary damage and therefore higher claims costs, while the customer meanwhile feels unvalued and unsupported. Merlin implemented a dedicated EoW hub which, as a centralised unit, ensured the right people got to the right claims quickly and efficiently. Combining this with streamlined supply chain management meant policyholders were reinstated in their homes at the earliest opportunity. Insurer clients saw a reduction in claims costs and an increase in policyholder satisfaction as a result. The EoW hub was a resounding success and is now an integral part of Merlin’s winter surge strategy.

 

 

Three Awards in Two Days for Merlin

15/05/2012

Merlin is delighted to announce recent successes at the Insurance Times Claims Excellence Awards, on the 8^th May and the Claims Innovation Awards on the …

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Friday 13th - Unlucky?

13/04/2012

Contrary to superstitious belief it appears Friday the 13th is not so unlucky for Merlin’s customers according to a review of recent claims data.

A comparison …

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