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Ensuring the insurance industry with less invasive inspections

Censeo is a multi-award winning, market leader in providing high-volume, fast turnaround Engineering, Building Consulting & Geo-Radar services to the Insurance, Construction and Allied Health sectors across Australia. The firm uses IDS GeoRadar technologies to provide less-invasive inspections for the insurance industry. In this episode, we discuss why Censeo was chosen as a 2019 Hexagon Honouree with Censeo CEO Kate Middleton.

BK: Censeo is a multi-award-winning market leader in providing high-volume, fast-turnaround engineering; building consulting; and geo-radar services to the insurance, construction, and allied-health sectors across Australia. The firm uses IDS GeoRadar technologies to provide less invasive inspections for the insurance industry. In this episode, we discuss why Censeo was chosen as a 2019 Hexagon Honoree with Censeo CEO, Kate Middleton. Thanks for joining us, Kate.

KM: Thanks very much for having me.

BK: So, we’re very honored to have you as one of our customers and also very excited to have you on the show to talk about innovation in your industry. So starting off, tell us a little bit about Censeo, what you do there.

KM: Sure. So Censeo is an advanced inspection company that operates in Australia and the UK. We were previously ASX listed, and then I acquired the company about three and a half years ago. So Censeo typically has come from an engineering and building-inspection background, catering to the insurance and government sectors. When I took over the company, one of the things I identified was that we were doing a lot of visual inspections for insurance companies and other customers, but there wasn’t really any technology underpinning my staff’s findings. So that’s when I started the journey of exploration with Hexagon and their sub company, IDS GeoRadar, to see whether or not there were some ways to better fulfill our client’s needs.

BK: Going along with that, what are some of the biggest challenges that you’re facing in your industry right now?

KM: Yeah. Particularly within the insurance market globally, there’s a lot of time and money spent in innovation for the sales- and claims-management process but not at the back end when you’re doing your technical assessing. So that’s all of your engineering and building functions, where you’re trying to determine what the losses within a structure are. So at the moment, there’ll be a site inspection where determining whether or not there are any issues with the footing of a house, for example, or cracked pipes underneath the subsurface is really beholden on an engineer making a hypothesis about what is wrong with the structure.

And the issue with that is that for most insurers, the largest claim type outside of natural disasters globally is actually escape of liquid. So that’s trying to identify where a source of water or where a source of structural damage is under a home. By solely relying on visual inspections by engineers, as they do now, essentially an insurance company will pay a claim, and then because they don’t know the root cause of the issue, a year, two years, three years later they have subsequent claims for exactly the same issue. So it basically drives up the cost of a claim.

The other issue is that when there is a natural disaster, such as a terrible hurricane or flood, people are displaced from their homes. And during that period when a home is being rebuilt, insurance companies are required to pay for temporary accommodation, which, in many cases, after a hurricane or flood, can be about 18 months. So we identified that another way of using technology is to actually monitor the stability of a structure so that insurers and builders can help people back in their homes more quickly, but additionally, they can start the construction process more quickly because similar to the inspection process, with the land-settlement-period process, it’s really a hypothesis by the engineer about when it’s safe for the constructor to start building again.

BK: That’s great. So lots of really good advancements moving forward, utilizing technology, offering great solutions. Is technology making anything harder in your scenario?

KM: Ooh, that’s a good question. You know, I think what is making it harder is actually educating the customers about how the technology can be used because Hexagon is so well established globally in really large industries, such as mining, and aerospace, policing, and the military, but this really is a greenfield use of the geosystems and inferometric technology that Hexagon develops. So, actually educating the end user about how much we can reduce their claim’s lifecycle and how much money we can save them in the long run has definitely been a barrier. But, you know, the privilege of winning this award will certainly help us accelerate our ability to communicate to others just how innovative and worthwhile this new process is.

BK: So, what are you doing to help your end users to adopt the new technology and be trained up and be able to utilize it efficiently?

KM: We’ve taken steps to actually train people within our biggest client teams in the use of various systems, including the Opera Duo and the C-thrue concrete scanner. We find by not just being an end-service provider but actually including them in the inspection process so they have some sense of autonomy and information has been really helpful. And also, the actual data, because Hexagon’s an incredible technology company, it’s the data that underpins the devices that is really powerful. So we found that once we’ve incorporated the data that we’d gather from the back end of the various geosystem devices and include it in a normal, typical inspection report that the client would see, it’s that added layer of information that no other provider is giving them. And that in itself is a great selling point because they pass that on to their executive team, the executive team says, “Why aren’t we doing this on all claims?” And that really serves as a catalyst.

BK: So, you’ve explained a lot of this—maybe you can dive into this a little bit more—but why is it hard to keep up with some of the new technology in your industry? And even specifically, what are some of the pain points that make it difficult to innovate?

KM: Look, without throwing shade at my industry, the first one would be just the baseline technical capability of the persons within the sector. So, for example, not so much the engineers—they’re highly qualified—but within a traditional loss-adjusting model, which is applied a lot in North America and the UK, for example, and we’re just breaking into those markets, the people who are completing the inspections have been taught about loss adjusting, I guess just from a property standpoint. And there isn’t really any education about what other technology’s available to them within their training process. So it’s like any industry—you don’t know what you don’t know. So I think for me one of the challenges will be looping in to the training and sales cycle of that big-end customer, so the large insurance companies and the large constructors, early on so that the people completing inspections and managing claims understand that there are alternatives available for them, instead of just a manual inspection process.

The other barrier is obviously educating people about the costs. Some people would see the devices as being a large upfront investment, but, really, when you can commercialize and do a really great business case around how much money and time you’d save on a per-claim basis, it is quite a compelling business case. It’s a fairly small upfront investment.

BK: Well, how does your team identify ways to be innovative?

KM: Well, I really like to apply design-thinking approach. You know, when I started my career, I did work in project management and innovation for some large insurance companies, so I’ve worked within end-customer businesses. And innovation was largely driven from within, particularly 10 years ago when innovation became a real buzz word. Everyone started setting up PMOs and innovation centers and centers of excellence within their business to try and come up with cool ideas.

We use a different approach in design-thinking approaches to think about the end customer, but not just that. We actually create an avatar in our mind or on paper or a whiteboard and say, “Okay, who is our customer?” And we put a name and a face and an age to it and think about, what are the pain points for that individual end customer and that company, and at what point do we intercept that problem, and what kind of device or technology will we use to help with that?

And I’ll provide an example, if I can. I’ve got two examples about different life cycles. The first life cycle we would intercept would be within the upfront inspection phase of a claim. So you might have, let’s call him Barry. Barry’s a 42-year-old structural engineer who’s been doing insurance inspections for 15 years. He is tech savvy but doesn’t seek to learn about tech but will adopt it if he needs to. Barry is frustrated that his end customer is always questioning the veracity and the outcome of his reports. They feel he makes too many unsupported hypotheses about what’s wrong with the building, but with no proof. So Barry has approached his boss about whether or not there are ways to support his findings. So at that point, Censeo would come in, and we would either do a C-thrue scan or an Opera Duo or some CCTV at that point for Barry so that he’s got additional information for his report. So that would be point number one.

Point number two might be at the end of a claim cycle where, say, there’s been an awful flood or hurricane, and the claims inspector’s already been out there, and the insurance company has already accepted that, yes, this is an insurable event, and, yes, we’re going to rebuild Mrs. Smith’s home. Now, at that point in time, you typically need an engineer to go out to the site and determine whether or not the land is stable enough to commence construction. So the customer with the pain point at this point in time is actually the building company, the constructor. They’ve got all these purchase orders to commence work, and they really want to start billing for their work in progress, but they can’t actually start the build until an engineer clears them that the land is stable. And the other caveat to that is during this entire period, the insurance company is paying for Mrs. Smith, who owns that home, to live in accommodation elsewhere.

So, currently, an engineer will make a hypothesis, again about whether or not the land’s stable, and particularly in Australia and the UK, there’s just a standard caveat of a six-month settlement period after a large event before you can start building, particularly where there’s been land subsidence. So in this scenario, Censeo would come in, and instead of relying on a hypothesis from an engineer, we’d actually use some crack-monitoring devices such as the HYDRA-G or something similar to actually monitor that house over a period of time, maybe a month. And then if we can categorically say that the movement is within building limits, then, essentially, that means that the construction company can start building the home more quickly and bill out more quickly and get paid more quickly, and Mrs. Smith gets back into her house more quickly, and the insurance company is spending tens of thousands of dollars less on temporary accommodation costs.

BK: Excellent. So, great, great points. Great ideas. How are the results so far?

KM: It was slow going in Australia. I think people are scared of the unknown, but in the UK, they’ve been much quicker to adopt, and I think the reason for that is Hexagon’s actual brand presence in the UK. So Leica and Hexagon and IDS are familiar household brands in the UK. So when we’ve spoken to insurers over there, introducing them to this technology hasn’t been difficult, because they’re already aware of the brand, and also the utility mapping sector in the UK is far more advanced just because of the nature of the age of the buildings over there. So we’ve found we’re getting much more traction in the UK and Europe than Australia. But, you know, it’s like anything—sometimes you have to export an idea in a product and then bring it back in order to get some traction.

BK: Excellent, excellent. So, Hexagon specifically is helping with brand awareness. What other ways is Hexagon’s technology supporting you with your innovation?

KM: I’d have to say it’s actually probably one of Hexagon’s brands, IDS Geosystems, particularly in Australia. The team there have been very collaborative, so we launched a few, like, really quite innovative research and development projects which we completed jointly with them, and that really helped fundamentally with us having funding to explore the use of geo systems for insurance. So I’d say it’s actually the people capital who’ve been the best. I already know that the systems and the technology and the data augmentation is excellent, but it’s actually been the internal team who, even though I’m a customer, they’ve really worked in conjunction and collaboration with us to explore how the technologies can and can’t be applied within my sector. So, hats off to them, you know.

BK: Kate, what does it mean for you to win the Hexagon Smart Change recognition?

KM: For me it’s an absolute career highlight. It means everything to the team and I. When you have a really audacious goal to help shape and change your industry, which, in my case, is insurance and construction, it’s really heartwarming and quite overwhelming when a company with the caliber of Hexagon acknowledges that the work you’re doing is innovative and groundbreaking. And so to have that acknowledgement, for me, means that all of the time and the money and the effort and the strategy and the negotiation and the maneuvering over the last three years has been worthwhile because at the beginning of this journey I was told I was crazy, that there’s no way there’d be devices out there that can see through concrete and that can detect pipes. And to know that not only is that technology out there but it’s very widely used in other very advanced sectors like mining and aerospace is really heartening. And I think it’s going to exponentially grow our idea and our business, and I’m just very grateful for the opportunity.

BK: It’s wonderful. And great to prove them wrong and then see the success now actually tangible, so congratulations. That’s wonderful.

KM: Thanks very much.

BK: Thanks so much for your time today, Kate. Really appreciate it, and thanks for being on the show.

KM: My pleasure.

BK: For more information on our discussion and Censeo, Censeo.com.au. And, of course, to learn even more and listen to additional episodes, head over to hxgnspotlight.com, and thank you very much for joining us here on HxGN Radio.