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Insurance, White Papers

Making the Right Call: Using Content Recognition to Assess Water & Fire Damage

Discover how insurers can use content recognition technology to assess water and fire damage and streamline the claims process. Learn more at Fixzy.

Each year property owners file thousands of insurance claims for water and fire damage. Recent research shows that the number of water damage claims has surged over recent years, placing significant demand on insurers to provide timely, responsive support.

The Verisk Analytics’ ISO unit analysis shows that 1 in 50 property owners submit a water damage claim each year (a 2.05% frequency rate). Add to this the fact that first responders attended 156,043 fire-related incidents last year. Given these statistics, it’s easy to understand the resources required by insurers to assess water and fire damage.

How Insurers Currently Assess Water & Fire Damage

Validating insurance claims following an incident is no easy task. Property owners are often, and rightly so, under stress having experienced damage to their home, which means that insurers need to respond quickly and proactively to retain customers.

Water and fire damage also has to be assessed quickly as the longer the assessment takes, the worse the compound effects become. Smoke and mould damage might not be immediately apparent following an incident but can severely impact the property and habitants’ wellbeing over the long term.

When assessing water and fire damage, insurance providers need to dedicate resources to visit the property to collect the right information. Insurance assessors have to examine all damage caused by the fire, including heat, smoke, ash, soot, fumes, toxins and mould. Not doing a thorough assessment could easily lead to customers not receiving their full settlement and being left feeling upset, disappointed and even living in an unsafe environment.

Introducing Image Content Recognition

Emerging technology, like AR, machine learning and content recognition, can significantly disrupt and impact the claims process.

Content recognition makes it easy for insurers to process claims without being physically present by allowing property owners to assess damage through their smartphone. The system can recognise all content in the damaged room, create a list and then help property owners replace the damaged items on online marketplaces while insurers validate the claim.

While content recognition has its limits, it does allow insurers to get an accurate picture of the scale of the damage, set the claim amount and train the system to produce even better results over the long term.

Benefits of Content Recognition & Digital Claims

Integrating technology like content recognition into the digital claims process can offer some significant advantages to insurers, including:

  • Improved customer experience. Research shows that embracing modern technology can help insurers improve their customer satisfaction scores by 20%. Greater customer satisfaction naturally leads to higher customer retention rates, positively impacting insurers’ bottom line when customers renew premiums.

  • Efficiency. Digital claims can also reduce expenses for insurers by as much as 25-30%. Technology, like AR, allows insurers to process claims quicker, more efficiently and without the travel time or cost.

  • Effectiveness. Content recognition can also improve claims accuracy as machine-learning technology offers far greater accuracy rates than human equivalents. With physical inspections, insurers report an average error rate of 30-35% but using technology can reduce this to a 10-0% error rate.

Challenges of Content Recognition

While image-based content recognition offers some significant benefits for insurers, the technology still has a way to go before it can truly disrupt the digital claims space.

Creating content recognition technology requires building a large, accurate dataset that consists of thousands of images. The technology then uses these images to compare and assess the damage. Creating a robust dataset of accurate images is essential for the technology to produce the correct results, but sourcing such an extensive database isn’t easy.

Content-Based Image Recognition in Action

Given the many advantages of content-based image recognition, it’s not surprising that insurers are increasingly investigating how they might incorporate the technology into their digital claims process.

At Fixzy, we’re working with the University of Edinburgh to develop an application that helps insurers detect mould in buildings. Mould often occurs following a fire or water damage but is difficult to pinpoint given its ever-changing sizes, shapes and colours.

We’ve built our own data centre to allow for accurate content recognition and created an application with a complete backend system. As a result, insurers only need to take 10-20 pictures of the damage and auto-upload them to SmartPix to start the digital claims process. The system then uses Deep Learning to categorise the images and validate the claim.

Technology like Fixzy makes it significantly easier for insurers to accurately assess water and fire damage, validate claims and support customers through traumatic experiences.

Other Use Cases for Content-Based Image Recognition

Content-based image recognition can detect and assess fire or water damage. But, it also offers a range of additional use cases for property owners and managers.

For example, content-based image recognition also makes it easy for landlords to take inventory of rental properties, note all contents, take images, store them on a database and then review when the tenant moves out. 

Managers of large office and commercial buildings can also benefit from image-based content recognition. For example, rather than sending engineers across an airport to fix a problem, engineers can assess and address the issue from their desk.

Embrace the Future with Content Recognition

Content recognition may be new, emerging technology, but embracing this emerging technology can unlock significant benefits for insurers and help them gain a competitive edge.

With technology like content recognition, insurers can offer support following an incident remotely and improve claim accuracy — a win-win for everyone involved.

The future of digital claims has arrived.

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Posted in Insurance, White Papers on May 18, 2021