Technology transforms sectional title insurance landscape

It’s the bane of every body corporate and managing agent’s life: a geyser bursts or a light fitting burns out in a residential unit, and a flurry of emails and phone calls breaks out between residents, agents, insurers and service providers.

Thanks to technology, there’s an easier way, says King Price’s community insurance partner, Ria Furriel. For a growing number of sectional title developments, estates and retirement villages, automated claims management systems are saving time, money and headaches by allowing all claims to be logged electronically, authorised instantly by the insurer, and jobs scheduled with an approved service provider for immediate repair – with no human interaction.

This automated claims management system is the jewel in the crown of King Price’s community insurance offering, which was launched in 2016 into the local sectional title market to meet the twin challenges of high expectations of property owners and poor insurance service delivery. The product was initially launched directly to managing agents, but as of May, it’s being offered through brokers as well.

“Under the Sectional Titles Schemes Management Act (STSMA), insurance cover is a legal requirement for all community schemes. With building compliance top of mind for owners, we work with body corporates to determine the remaining useful life of their critical assets and produce a legally-compliant 10-year maintenance, repair and replacement plan (MRRP), including a risk and condition report on each asset,” said Furriel.

“This not only ensures building compliance but extends the useful life of assets and improves return on investment.”

Until recently, one of the bugbears of sectional title insurance was a lack of updated information and transparency around assets. The use of central management systems allows property managers to collect data from developments, making it easier to implement maintenance plans, collect levies, and run their buildings more efficiently and effectively.

Some of the immediate benefits that body corporates and managing agents are seeing are far more effective claims cost control, and shorter claims cycles and incident reporting lag times. Furriel estimates that up to 65% of sectional title claims are geyser-related – and integrating approved suppliers, like electricians and plumbers, into the management platform allows for faster, cheaper claims services.

“This integration has resulted in profound changes in how we operate and interact with the value chain. Multiple stakeholders – owners, trustees, brokers, managing agents and suppliers – can all connect to a central system, interact with one another, and create and exchange value. Everybody is on the same page, all the time,” says Furriel.

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 outside 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.

“By designing, creating and maintaining assets more efficiently, smarter developments give insurers the ability to create more accurate risk profiles – which often means lower premiums. They also enable predictive maintenance, with connected systems able to detect impending issues before they become problems,” said Furriel.