Before the claim: what Benelux insurers can learn from Nordic prevention

For most home insurance customers, the relationship with their insurer is still built around a few key moments: taking out or renewing a policy and, eventually, making a claim. In between, there are relatively few moments where the insurer can actively demonstrate value to the customer, and relatively little information about how risk is actually developing inside the insured home.

In the Nordic market, insurers have started to change this model by making prevention part of the insurance proposition. Connected technology and services allow them to help customers detect risks earlier, prevent or limit damage and, at the same time, build a new source of relevant pre-claim data.

The shift is therefore broader than claims prevention alone. It changes the customer relationship, creates new service opportunities, and gives insurers new information about risk before damage occurs.

“The interesting development we have seen in Scandinavia is not the technology itself,” says Laurens de Nooyer, Head of Sales & Business Development Benelux at Onics. “It is what becomes possible when the insurer becomes involved before the claim - both in the customer relationship and in understanding the risk.”

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From insurance product to prevention service

The starting point is not the sensor. It is the customer problem: how can an insurer help a homeowner recognize and respond to a risk before it becomes serious damage?

Imagine a home insurance customer adding a prevention service to their insurance proposition almost as easily as adding another service to a broadband or television subscription.

A package arrives at home containing connected sensors for risks such as water leakage and fire. The customer installs the devices, connects them through an app, and from that moment the insurance relationship starts to look different.

Several months later, a sensor detects water under a kitchen appliance. Instead of discovering the leak hours or days later because the floor has been damaged, the customer receives an immediate notification and can take action.

If the alarm is not handled, it can be escalated to an alarm receiving centre so that the situation is followed up. A potential insurance claim has become a prevention and service moment.

For the customer, this makes insurance more tangible. Instead of buying protection that is mainly experienced after something has gone wrong, the customer receives a service that can actively help protect their home. Early detection can mean the difference between cleaning up a small amount of water and replacing a floor or kitchen, reducing damage, disruption, and stress.

It changes the traditional customer journey:  Damage → claim → compensation

into a journey that can start much earlier:  Risk → detection → intervention → prevention → service

And throughout that journey, new information is generated about the risk, the event, and the actions taken before a claim occurs.

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A broader business case for insurers

For the insurer, claims reduction is the most obvious part of the business case.

A small water leak detected within minutes can have a very different financial outcome from the same leak remaining unnoticed for several days. Connected detection gives the customer an opportunity to intervene earlier, reducing the severity of the damage or potentially preventing a claim altogether.

But the business case does not stop at claims.

Prevention creates a service around the insurance product and gives customers another reason to interact with their insurer. It can support more differentiated insurance propositions, strengthen the customer relationship, and create a platform for additional services around the home.

At the same time, connected prevention can provide information that helps the insurer build a better understanding of risk before a claim occurs.

Prevention can therefore create value on three levels: reducing or limiting claims, strengthening the customer relationship, and building access to relevant pre-claim data.

“The business case becomes much broader when you look at it from that perspective,” explains Laurens. “Claims reduction is one part. Prevention can also strengthen the customer proposition and create access to relevant pre-claim data. Together, that creates opportunities to reduce the cost of risk, create new customer value and better understand how that risk develops.”

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From historical data to pre-claim data

Traditionally, insurers have built their understanding of property risk largely from policy information, property characteristics and historical claims. These remain essential sources, but they primarily describe what is known about a property or what has happened in the past.

Connected prevention adds a different layer.

Sensors and connected services can generate information about what is happening inside the insured property before damage develops into a claim. Over time, this can help create a more dynamic picture of risk and how it changes.

The distinction is important. A claim tells the insurer what went wrong. Pre-claim data can potentially provide information about what was happening before it went wrong or why a developing risk never became a claim at all.

This is especially relevant in combination with AI. Better models do not simply require more data; they require relevant data with the right context.

The opportunity is therefore not simply to collect more data. It is to collect more relevant data.

Combined with existing policy, property and claims information, pre-claim data can provide new input for risk assessment, early intervention and the development of future prevention services.

The long-term value of prevention may therefore go beyond preventing today’s claim. It can also help insurers build a better understanding of tomorrow’s risk.

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What does this mean for Benelux insurers?

The opportunity for Dutch and Belgian insurers is not to copy a Scandinavian model. Customer expectations, distribution structures, and insurance markets differ.

The more relevant question is what can be learned from several years of practical experience with prevention and how those lessons can be translated into the Benelux market.

Many of the underlying challenges are already recognizable: pressure on claims costs, changing risks inside the home, limited differentiation between insurance propositions, and the need to build stronger digital customer relationships. And last but not least the correct correlation and interpretation of collected data.  

Prevention introduces a different way of addressing these challenges. It creates an opportunity to intervene earlier, provide customers with services before damage occurs and generate relevant information about risk before the claim.

That changes the role an insurer can play in the customer journey.

“The sensor is only an enabler,” concludes Laurens. “The real change happens when prevention becomes part of the customer journey. That is when the insurer can start creating value before the claim and, at the same time, build a better understanding of the risks they insure.”

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This article was originally published in Insurtech Digest. Explore the full edition for more insights and perspectives from across the insurtech industry.