Insurance has always been a reactive industry. An incident happens, and the insurers pays out on the claim. However, with advances in technology, is the industry moving to a more proactive future? One area where that transition is already becoming a reality is water-related property damage.
Property claims are increasing. Whether it is caused by internal faults or the increasing frequency of natural catastrophes, insurers need to find a way to reduce their costs.
FinTech Global recently spoke to Dan Simmons, managing director and founder of Quensus, about the future of property insurance and water risk detection.
He explained that UK insurers paid a record £6.1bn in property claims in 2026, leading them to seek solutions to ballooning costs. He said, “The industry is abandoning the historical “detect and repair” model, driven by unsustainable costs.” Insurers are moving to a ‘predict and prevent’ architecture, powered by real-time asset intelligence.
Internet of Things (IoT) technology underpins this capability. Sensors and AI can continuously monitor properties and pipework to identify potential risks and detect leaks. Water supplies can then be shut off automatically before a leak turns into a major claim. Simmons noted this is “fundamentally transforming how underwriters manage portfolio risk.”
An undetected leak can quickly turn into a sizable claim. For instance, a leak in an unoccupied workplace over the weekend or a burst pipe in a home while the residents are out, can quickly cause devastating damage to furnishings and the building’s structure. By simply installing a few sensors, insurers can help prevent claims ever needing to be made
The potential savings IoT can deliver to insurance firms is significant. Quensus claims its escape-of-water monitoring devices can reduce claims by more than 80%
Given the potential savings for insurance firms, they are clearly incentivised to explore how they can start deploying IoT and AI tools. The challenge is convincing policyholders to have the sensors fitted. Simmons believes the solution lies in moving away from simple recommendations and towards structural subsidies.
Some insurers are already making strides in getting their policyholders to adopt the technology. Insurers, such as Aviva and Hiscox, are absorbing the capital expenditure of IoT hardware and funding the installations or supplying free devices to policyholders. The initial upfront costs can pale in comparison with the potential future claims costs.
Simmons noted, “This B2B2C model requires a paradigm shift in property risk pricing, moving away from static actuarial tables to dynamic, usage-based platforms. Brokers are increasingly using active flow-monitoring technology to negotiate better terms, including the total waiver of high “escape of water” excesses. Insurers must financially reward active asset management to achieve scale.”
One of the biggest costs for property insurers is escape-of-water, accounting for over 28% of domestic claims in the UK, costing insurers more than £1bn annually.
Like most transformative technology, there are barriers insurance companies will need to address to ensure it can reach its full potential. For Simmons, alert fatigue is among the chief concerns that needs to be addressed. Systemic barriers will be needed to ensure false alerts do not overwhelm teams or shut off water supplies for no reason, leaving policyholders without water until checks are completed. Simmons also emphasised the need to monitor repair lag for complex commercial environments where passive sensor notifications are frequently ignored.
If insurers do not cover the installation costs, this can also create a barrier for those living in rented property. Simmons said, “The “split incentive” challenge persists: landlords bear the installation costs, while tenants and insurers reap the financial rewards.”
He added, “Finally, integrating continuous IoT telemetry into legacy IT systems designed for static, annual renewals remains a significant operational hurdle for traditional underwriting frameworks.”
Once these barriers have been overcome, IoT devices and AI can become highly valuable tools to the insurer. Historical data already gives them the macroeconomic view of exposure, but it alone cannot account for immediate environmental shifts or sudden plumbing degradation in complex commercial structures.
Looking ahead at the future of property insurance, insurers will need to overlay traditional actuarial models with real-time asset intelligence, Simmons explained. He noted, “By deploying high-resolution flow meters and environmental sensors, underwriters gain ground-truth visibility into a building’s live risk profile. The goal is to enrich historical data with continuous telemetry via API integrations. This allows insurers to validate that mitigation hardware is actively functioning, creating highly accurate, building-specific pricing that dynamically adjusts to operational realities.”
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