Preventing Catastrophic Water Damage

IoT sensors are proving their worth by preventing small problems from becoming big losses. In this episode, Pete Miller talks with George Chedraoui, Senior Director, Corporate Risk & Resilience for Highwoods Properties Inc., and Sean Ringsted, Executive Vice President and Chief Digital Business Officer of Chubb Group, on how on how each is realizing big benefits from deploying smart water sensors.

Segment 1: (00:02:31): Pete and George discuss Highwoods’ success with smart water sensors in its commercial office buildings, pivoting from small pilot to wider rollout, training as critical success factor, preventing a loss demonstrates the ROI, taking a more holistic view of risks, and opportunities to integrate technology in risk management strategy.

Segment 2 (00:20:40): Pete and Sean take a deep dive into the future for water peril mitigation, Chubb's acquisition of StreamLabs technology, empowering proactive risk management, critical lessons from sensor deployments, embedding technology into insurance value chain, and gaining powerful new insights for risk prevention and pricing.

George Chedraoui - Highwoods
George Chedraoui
Senior Director of Corporate Risk & Resilience
Highwoods Properties Inc.
Sean Ringsted - Chubb
Sean Ringsted
Executive Vice President and Chief Digital Business Officer
Chubb Group
Show Transcript

Pete Miller [00:00:03] Hi, I'm Pete Miller, president and CEO of The Institutes. We're a global not for profit, whose mission is to educate, elevate and connect the people focused on risk management and insurance. You're listening to Predict and Prevent, a podcast that explores how technology and resiliency can prevent losses before they occur. In each episode, we learn about innovative solutions and hear from leading experts on how they are making these approaches a reality today. Aside from natural catastrophes, there are still plenty of perils affecting personal and commercial property that will benefit from predict and prevent. Fires, water damage, lightning, tornadoes, theft, just to name a few. Smart home and smart building technologies offer a way to predict risks, prevent them from becoming losses and mitigate damage. Is this scenario where insurers are likely to make their first big predict and prevent bets? Let's find out in this episode. To explore today's topic, I'll be sitting down with two guests who know all about this. First, I'm sitting down with George Chedraoui, senior director of corporate risk and resilience for Highwoods Properties Inc. Highwoods is based in Raleigh, North Carolina, and owns a portfolio of office buildings throughout the Sun Belt, with about 175 properties in 28 million square feet. Risk management and resilience is central to the company's business strategy, creating value for shareholders and customer. George joined Highwoods in 2009. Previously, he worked for IBM as a global leader of well-being and health benefits. He holds a Bachelor of Science degree in industrial engineering from Penn State University. During our conversation, George shared the strong success they are having through the use of Internet of Things sensors provided by its insurance partner, Chubb Group. George had some great insights to share about how risk managers and insurers can effectively collaborate on Predict and Prevent. Well, George, I'm very interested in what you do, and I'm very grateful for your time here today. Tell us a little bit about Highwoods Properties and what you do there. 


George Chedraoui [00:02:45] Sure. Well, I'm glad to be here. Thank you, Pete. I function as the senior director for risk and resilience. That's kind of a fancy word for being the risk manager among some other things. Highwoods Properties is a real estate investment trust. It is a REIT. We own and operate commercial office properties, primarily in the Sun Belt. We own about 175 properties comprising a little over 28 million square feet. 


Pete Miller [00:03:12] As I was doing research for this, I was very fascinated. And I know that you work with Chubb to learn about your IoT sensor program. So, George, could you just give us a quick overview of that? And you know what is it? How are you using it? Are you, you know, are you planning to expand it? And if so, when? And how are you going to do that? 


George Chedraoui [00:03:33] Sure. Well, the Chubb has been a terrific partner of Highwoods for the last ten plus years. They have been a key player in our Risk and Resiliency Program. They have helped improve many of the programs that we are enjoying at the moment, you know, through their loss control, through their claims to, you know, better underwriting. I think we have become a more resilient organization. Primarily, you know, due to that partnership that we've enjoyed with Chubb. When Chubb came to us maybe about a year and a half, two years ago and introduced this IoT technology to us, has they started describing what the program does and what it entails and what it what the capabilities are. I really got very, very excited. And and we you know, Highwoods, you know, historically has never been afraid to make investments and to get out of our comfort zone and and explore, you know, new ideas. And in [00:04:33]Highwoods fashion [0.4s] we jumped right in, and we did a pilot initially, you know, with five large assets, you know, these five buildings comprised about, you know, three million square feet or so. We just wanted to kind of test the waters to see how this technology works, perhaps get the kinks out of them. You know, it was supposed to be kind of just a one year pilot before deciding whether to go forward or not. But to be honest with you, after about four or five months of of experimenting with this technology, we found it to be so beneficial and of such value that we accelerated the adoption to the point now where we have it across over 55 properties, comprising roughly 55 to 60 percent of our square footage. So we're very excited about that. 


Pete Miller [00:05:23] And do you see that expanding into the future? 


George Chedraoui [00:05:27] Absolutely. So what we're calling, you know, phase one. Phase one comprises these 55 buildings. Those are the larger urban type buildings. And the reason we chose those to be in phase one is, you know, it was fairly obvious that the potential for loss was much, much higher than in those smaller suburban type buildings. You know, when you have a water leak that occurs on the 15th or 20th or 40th floor of a building, it doesn't take a whole lot, you know, for a simple lead to turn into a major disaster. So we wanted to focus on the larger buildings because that's where the greatest potential for loss was. And the solution, you know, the technology seemed simple enough that, you know, without, you know, any any major retrofits to our existing properties, we were able to, you know, simply adopt this technology, you know, again, you know, without really making any significant capital improvements to our properties. 


Pete Miller [00:06:28] So it sounds like the rollout is pretty simple, pretty simple installation and and and pretty simple rollout. No big process changes, nothing. 


George Chedraoui [00:06:39] And that's yeah, that's the beauty of this. You know, the only thing you need is a 120 volt outlet for the gateway to go in. But all the sensors that connect to that gateway are wireless, so you can literally put them anywhere, any location where there's a potential for water to to leak or to exist where water shouldn't exist. It's painless. And that's really what's exciting about is the simplicity and the efficiency and the low cost of implementation is, you know, these are all huge benefits of this program. 


Pete Miller [00:07:12] So no real barriers to overcome, everybody agrees and adopts and all that good stuff, George? 


George Chedraoui [00:07:19] You know, there are obviously some things that, you know, companies need to consider and we were no different, you know, you know. There are, you know, some kinks that needed to be worked out. There's some training that we needed to do for our old folks. There are some, you know, education classes that we have to do with our supply chain and our vendors, specifically our security staff and our janitorial staff. So one of the things that we were concerned about and this is, you know, this is coming from our property managers and our building engineers out in the field. You know, they were a little bit concerned about, you know, having false alarms, you know, where, you know, they're getting that signal, that alarm or that bell, you know, two o'clock in the morning on a Friday or Saturday. So they were a little bit hesitant at first. But, you know, we did this pilot, you know, and we had luckily, we had very little, you know, very few false alarms, mainly because, you know, we prepared our security staff, we prepared our janitorial staff. And, you know, the risk was there. You know, like what happens when their janitorial the person is mopping the floor, you know, purposely putting water on the floor. And then those sensors picked up that mop. You know, we were concerned that there would be, you know, an awful lot of those types of false alarms that would have kind of created, you know, some pushback from our folks in the field. But again, it's an ongoing thing, you know, through ongoing training with with our folks and with with our supply chain, we're able to drastically reduce the error rate or the the false alarms. You know, it's not down to zero by any means. And I don't think it'll ever be down to zero just because of the nature of how, you know, property management is operated, but I think we are we have it down to a manageable situation. 


Pete Miller [00:09:04] Sounds like it's been really successful implementation. So can you give us examples of how the program has benefited you, prevented losses, helped your customers and that stuff. 


George Chedraoui [00:09:16] Of course. Well, I see the reports. You know, they they come to me, you know, regularly most recently and this is really a success story. We in part of our phase one installation, one of our flagship built, the flagship buildings here in Raleigh, you know, we had a third floor supplemental HVAC unit that belonged to one of our retail customers. It's a restaurant, a grade below it. And the drainpipe on that HVAC, supplementally which again belongs to our customer in the building, clogged up. Typically, if we did not have that sensor in there, water would have simply seeped down from the third floor to the second floor to the first floor. That's how, you know, you know, water finds the path of least resistance, so to speak. Luckily, you know, two days earlier, Chubb had come to town and they helped us, you know, with the installation of this one building. And we had a sensor right there and then. And what do you know? You know, the sensor picked up the leak right away. Our building engineer got the signal and he was fortunately right there in the building. You know, this otherwise would have been like a 20, 25000 dollar property damage loss. And we prevented it. You know, it was virtually a non-event. So, you know, we consider that a huge success story. 


Pete Miller [00:10:35] So you've touched on a little bit, but sort of ROI, it's from a business perspective, right? I think we try to cover, Predict and Prevent from a lot of different angles, but for for your business that may be an example, but can you give us other example like who pays for this program, first of all? And then how do you calculate, you know, the ROI, whether you know, whether it's really worth it? 


George Chedraoui [00:10:58] When you look at our the sector that we're in commercial offices, you know, our buildings tend to be fairly resistant to natural disasters. You know, basically we're dealing with, you know, concrete and steel structures. Yes, we have glass curtain walls and things like that. But, you know, generally speaking, you know, those types of assets, you know, are very well constructed. They tend to be fairly resilient against most perils. The one peril that kind of trumps all of this is is water in the plumbing leaks that come from from within the building. And, you know, historically, we've always kind of assumed, well, geez, you know, yes, you've got to, you know, 40 storey building, a million square feet, you know, with a lot of, you know, water sources inside the building, chances are things will happen. We've taken you know, we've kind of assumed that, you know, there are some things that are that are within our control and others that are outside of our control. In this particular case, you know, we obviously believe that we can control that peril. We can control that risk. And when you look at our ten year history, by large, the most frequent type of loss and the most costly type of loss has been plumbing, water leaks within within the building. So when you we look at the ROI it's really not that difficult from a direct financial comparison of how much we're paying for those sensors, which is fairly nominal, really a nominal cost compared to simply preventing one loss. You know, preventing one loss in a high rise building will more than pay for the entire probe. So that's kind of the direct, you know, ROI. But for us, we're not doing it to get the ROI. We're doing it because of our customers in our buildings. You know, we love our customers. They are the the lifeblood of Highwoods. And when an incident occurs inside our buildings, that creates disruption for our customers. We take that personally to the extent that we can do something about that disruption and mitigate that risk and create a business continuity plan that allows the customer to continue to occupy their space without, you know, interruptions from their space. You know, obviously, you know, that's a huge differentiator for Highwoods. So, yes, we do it for the ROI on one side. But really, and this is something that comes down from our senior leadership team, including our CEO. You know, anything that we can do to keep our customers happy, that is by far our number one driver for this for this technology. 


Pete Miller [00:13:44] So it sounds like ROI is a measure, but there are other maybe even as important measures to Highwoods. 


George Chedraoui [00:13:51] Maybe even more important, you know. If you start losing customers because, you know, they're not happy with you, that's not sustainable. 


Pete Miller [00:14:01] So often times people go, well, I can do this myself. I can work with my insurer. You decided to work with Chubb on this. So could you could you just talk for for a little bit about the specific benefits of working with your insurer as opposed to maybe trying to do this on your own? 


George Chedraoui [00:14:20] Sure. Well, for one thing, you know, for for selfish reasons, I'm kind of a one man department, so to speak. You know, it's like I'm the risk manager. But, you know, I have 350 co-workers out in the field, you know, that that help me. So being, you know, kind of a single person department, I could really do this on my own for one thing. So I needed the help of Chubb, to be honest with you. Secondly, you know, when Chubb, you know, came to us with this proposal, with this technology, it certainly resonated with me because it sounded, you know, I mean, it sounded like, you know, it fit within, you know, our our operation within our culture. And it was kind of a almost like a turnkey solution. You know, they were the experts in this. You know, they we've had several meetings and conference calls and web access to kind of go through the whole technology and the solution so that I in turn can sell it. So they were extremely helpful in being that sounding board and being the technical advisor to me so that I can help sell that program internally to our folks in the field. And that was a huge benefit. So, you know, again, I really couldn't do this on my own. We needed, you know, we needed someone like Chubb to help kind of pave the way. And thirdly, look, let's face it, I mean, I'm dealing with their underwriters on almost a daily basis. So it certainly doesn't hurt to have that conversation with the underwriters. Say, hey, hey, by the way, we're engaged, you know, with with your IoT solution on this. And then I think, you know, there's certainly some synergies and some benefits from that perspective. 


Pete Miller [00:15:55] So kind of an existing relationship where you can implement something that not difficult from a cultural point of view, an organizational point of view, and you already have the relationship established. 


George Chedraoui [00:16:06] That's right. 


Pete Miller [00:16:07] Everybody wins. Pretty good story, George. George, you're a leader in this area. I mean, you're a foresight in real-time intervention, right? That's a bit different. But starting to be something that we're seeing and obviously at the institutes we think, Predict and Prevent is there's just a great thing going forward. So as somebody who's done this kind of on the vanguard, if you will, what would you what advice or words would you share with risk managers who might be thinking about doing similar initiatives? 


George Chedraoui [00:16:39] Well, I would certainly advise them to look at your portfolio in a holistic fashion. You know, many of my peers are they seem to be more concerned about, you know, the hurricanes and and the fires and then the things that, you know, will gain, you know, kind of, you know, media attention. When a plumbing leak occurs in a property, it's not likely to make the news. So maybe tends to be a little bit less, you know, you get less publicity on it. But from a loss perspective, those are really the loss drivers. Again, for an office operator like we are, you know, plumbing leaks tend to be the biggest loss drivers for us. So this is huge. So I would I certainly would advise every property owner to look at their risk holistically and not just focus on the big items. Secondly, you know, don't be afraid to make investments in new technologies. You know, I mean, it's kind of in our DNA that, you know, we're willing to step out of our comfort zone and experiment with something. And if you are concerned, you can take baby steps like we did. You know, we did a five building pilot, do a pilot, take some time to study the results and the impact and make some decisions from there. The other thing for us is there's a thought that perhaps these things may be uncontrollable, that, you know, a lot of things are beyond your control, especially if you've got customers, tenants for other folks, we call them customers. How can you control the customer, you know, who's, you know, installing a coffee machine in their breakroom or whatever? Well, in fact, we we had these conversations with our customers and they were thrilled to know that Highwoods was partnering with our customers to mitigate not only our loss, but their loss. So it's one of those deals where it's really a win win win. It's a win for us as property owners, it's a win for our customers in that it minimizes damage to their property and it's a win for Chubb. So it's a great partnership. 


Pete Miller [00:18:39] A great partnership and certainly one that your leadership was instrumental in creating. So, George, thank you very much for your time. Appreciate you kind of giving us a view of tomorrow today with the things that you've done and with your forward looking way on controlling and predicting and preventing. So we're really grateful for your time, grateful for your efforts. Appreciate you taking time to share with us today. 


George Chedraoui [00:19:08] Thank you, Pete. My pleasure.


Pete Miller [00:19:13] George had great insights on how working with an insurance partner can have advantages for a risk manager and improve resiliency against potential losses. In this segment, I sit down with Sean Ringsted, an expert who has more than 25 years of experience in the insurance industry. We discuss how Chubb is working with clients like Highwoods to successfully deploy IoT sensors to gain real time risk insights that can protect against losses. Sean is the executive vice president of Chubb Group, as well as the organization's chief digital business officer. As leader of Chubb's 100 percent digital business unit, he's responsible for overseeing revenue products and capabilities with partners, including digitally native platforms and financial institutions. He holds a bachelor of science degree in biochemistry from Bristol University and a doctorate in biochemistry from Oxford University. He's a fellow of the Institute of Actuaries, and he also serves as a chair of the Institute's Risk Stream Advisory Board. Well, Sean, I really appreciate you taking time today to talk to us about something I know you've been involved with for quite some time and it's certainly been an industry leader on and that's predict and prevent. So Sean, how about before we get started, just give us a little background on Sean, how you got into this and how you kind of got interested in predict and prevent. 


Sean Ringsted [00:20:42] I guess my path has always been heavily intertwined with with actuarial science, risk management, data technology. So a lot of roads lead to lead to IoT in predict and prevent. And I guess the the real appeal, I think in the power of it is being able, historically, right, we're so used to aggregate information, aggregate data in the industry and lagging data. And that's not really necessarily when we try and attribute something to that rate that's not necessarily relevant to to actually what happened. And so now right through the data and the analytics and the tech, you arrive at IoT and something that's scalable, affordable and it works. And being able to now offer you some some real time insight right around around the exposure I think is just incredibly, incredibly compelling. 


Pete Miller [00:21:39] If we sort of sort of focus in on how Chubb has been using IoT in predict and prevent, can you just tell me sort of the landscape, as Chubb sees it for IoT? And, you know, we've we, I know that you acquired StreamLabs in 2021 and a little little bit about that as well. 


Sean Ringsted [00:22:02] Sure. Happy to. I mean, just high level and we can we can jump into the into the technical details. And I think on your when your last segment, you may have had one of our clients, right George Chedraoui, from Highwoods, sharing their success. And, you know, it's been fabulous working with with George and the team on Highwoods on their installation. They, they they've got a great, great story. But I mean, they're just a great example, I think, of of a team that's implementing their risk management strategy with the use of IoT sensors and real time alerts of just before little problems become big problems. Right. Highwoods is a great client example of that. And we have a number, large number now, growing number of clients that are taking this on. And so today, I mean, we have literally billions, tens of billions of dollars in insured properties that are being protected by sensors. These sensors, right, they're installed in both commercial and personal properties. And we've got numerous examples now of saves, what we call saves to us. Right. So we're preventing claims or anything that could have potentially resulted in millions of dollars in damage, right, if left undetected. And you only mentioned StreamLabs. So we acquired StreamLabs a couple of years back, very, very pleased with that with that acquisition. And they're a provider of IoT enabled smart valves and water leak detectors. And we continue to see a strong uptick in interest for residential and small business use. And I think for Chubb and I think it's the same with the industry, water damage is one of the top drivers of claims, right, and the frequency of cost of those losses continue to increase. And I don't think it's just the dollar amount associated with that. We can all picture the huge inconvenience, right, if you're now having to clean up after a water water loss and you think mold, right, repairing the carpet, having to find alternative premises and so on. So I mean, the inconvenience around that is is extraordinary. Though it really just underscores the value proposition, which is in it through IoT, right? They can detect a water leak. They can detect a change in temperature or change in humidity that just helps predict losses before they occur and hopefully it prevent them from happening in the first place. 


Pete Miller [00:24:24] You gave us some of the technical details of the IoT program. Can you give us a little bit more on on what what that looks like from your perspective? 


Sean Ringsted [00:24:33] Technical could cover like a broad you know, it's a pretty big umbrella, right? But if maybe if it just bucketed in terms of you think hardware, you think the software and the analytics. Right. So in terms of the hardware itself, I mean, we offer a whole home automatic shut off device and a full sensor system. So the shut off devices and the sensor system they use, we have proprietary software and that helps detect and alert for a range of potential issues. I think water leaks as mentioned, temperature changes and the humidity. Humidity is important, right, with would you think about as you think about mold. So this whole home automatic device that's really useful in a single family home, vacation home, think secondary home as well. Right. Whether the homeowner is not around to attend to a water leak. So that's that's that's very powerful. And then we have a full sensor system and that's deployed in a commercial setting. So I think a large college or a school, campus hospital or or life science, life science, and we're deploying water sensors. And these are smaller than a size of a hockey puck, and they have a tail that lies on the on the floor in that can detect water anywhere on the length of the tail and point of link sensor or spot sensors where water could be detected in specific areas of the of the building in any place these and in strategic or you may see obvious areas where you could have a or leaks, I think a boiler room or a laundry area this sinks sprinkler systems. Right. And then you adjust them a little bit for for sensitivity. But when it's up and running, the sensors will send alerts to cell phone. So the risk manager will get the alert on the cell phone in real time. And we also, interestingly, provide live and historical water flow data with with a usage chart. And I'm starting to see some interest here and in other uses, right. It's not just water leak but you know, businesses and homes that are thinking about water consumption. So these usage charts also have a very interesting purpose. The sensor is a battery operated, wireless, portable, and you've got a life from between 3 to 5 years. So easy to install, and plumbers that, you don't need the plumbers on these on these sensors. But we also deploy what we call flow based devices which are installed by a plumber, because he's going in on the on the waterline and these these will automatically shut off water if there's unusual flow detected. So those will typically right now will install in single family homes. And from a technical point of view, they're pretty interesting. They send ultrasonic sound waves and those waves record the flow of the water and that measure the water consumption and unusual flow to connect potential problems. So for both the the auto-shutoff device and sensor, you're sending this data real time to the StreamLabs app. So that's the software that sort of the client interface. We do it through an app. And so the client has got very, very good control, right. They know what's happening. It's protecting their home, their business 24, 24/7. To help with that protection, right, we're obviously put in a team, a team around this, so got dedicated risk engineering and IoT professionals to help provide consultation and and the installation support so that's very helpful for the homeowner. But what we found for the risk manager, right, it's really empowering them. You know, they get the alert, they go there and they and they can take they can take the preventative action. So we found it to be very empowering for our for our risk management clients. 


Pete Miller [00:28:23] In your experience, are there specific categories or industries that are benefiting most from this program? 


Sean Ringsted [00:28:31] All industries and all [00:28:32]occupancies [0.0s]  will benefit, right? I mean, the center offerings will span clients of all sizes. Right? And so we've done it all from a coffee shop. We've put in five sensors to these really large college campuses that have hundreds and hundreds of sensors to private residences. And so, yeah, it's it's very, very extensible. Right? Wherever you get, you have you think about water damage being being a problem and you think about a campus. And particularly during COVID, right, the risk managers started to call these sort of sort of, you know, part of their team. Right. Because, you know, you don't have to patrol large sections or you couldn't with COVID. Right. But you've got these sensors that are there 24/7 monitoring, so hospitals and protecting, you know, important equipment in hospitals, to office buildings, to hotels, to warehouses. And we even got private wine collections that we're protecting. So maybe we could come and take a look at yours one day too. 


Pete Miller [00:29:38] From an adoption perspective, what have you found in terms of best practices so that you have the best chance of success from that program? 


Sean Ringsted [00:29:47] Clearly. I mean, there's the conversation always starts, right, with learning how the technology works and then collaboration, then being thoughtful about where you put them. We've had lessons learned on where we've put them, right, and we've learned to sort of better mount them, better secure them. We've even had instances where we we had an alert and then realized that the grade on the concrete floor had a tilt, I think of a centimeter or something that was sort of barely noticeable, but of course, the water all flowed downhill to the to the sensor. So the installation is important, the calibration as well. Right. And just understanding that it is technology and you'll get one or two false alarms, not not many, but it's just that sort of bedding in process. And for some of the risk reasons, we, you know, we start small, one or two buildings and then expand into there into the entire portfolio. And Highwoods, that I mentioned at the start, are great, great case in point. Right? We started with them in five buildings and now now we're incredibly excited, right, we're expanding into 50 buildings in seven states, just getting the kinks out of the system, showing the risk manager this, value to this. And of course, when you get that actionable alert that's there, those are the easy those are the easy ones, right, to help to help customers through. 


Pete Miller [00:31:14] Let's just turn a little bit to how Chubb sees it from a business model point of view. So obviously, as you mentioned, you mentioned some some things around customer adoption. How does Chubb encourage clients to use these kind of solutions and these sensors? You know, how does a customer see the value in these new tools or does it require incentives or encouragement? 


Sean Ringsted [00:31:36] It's a great question. Right. And we're starting sort of down that path. And there are different, different engagement models. At 30,000 feet, I think a good mental model for framing, for framing some of this, right, where we think about fire and you think about the extensive underwriting practice and language around fire and you think about the devices that are in place today, right, to help mitigate fire and underwrite fire. You think smoke detectors, sprinkler systems and these are very much part of the day to day and folded into the insurance underwriting and the risk management and the and the risk engineering. And I think, you know, 30,000 feet, right, that's the path that we're on with the water peril, right, in terms of how it should be treated. Now, we're not there yet, but in terms of a mental model, you know, I think that's very much how we're thinking about this. And, you know, as you know, I mean, Chubb is has been an industry leader in offering loss prevention services to customers, help mitigate risks. And, you know, we think this this area of helping prevent water damage is an important will be a growing and important part of those prevention service capabilities. And so that's sort of explains the acquisition that we made of StreamLabs in 2021, and we're really happy with that. I mean, that's meaningfully expanded the breath of IoT devices and capabilities that we can bring to our clients. We'll be talking with the client risk engineering practice, the underwriting practice, and clearly getting the input from claims like to get to our clients before they've had the claim. But sometimes we get the we you know, we get the claim and, you know, have an understanding that these devices could have potentially helped mitigate. So, you know, everyone's part of that part of that discussion, right, where it where it can really help our help our clients. We'll meet, you know, with the risk manager on site and just really try to understand what makes sense, right, for their particular business and guide them through the sense of program from from start to finish. In terms of the ROI for the client, look, I mean, you know, one one loss will pay for an entire program. So from our perspective, it's you know, the economics have been pretty, pretty compelling. And the average I think the stats I mean, the average water damage loss in a commercial building, you're looking at about 100,000 dollars. Right. So an average 100,000 dollars and that the cost to install and monitor sensors in a typical building, I mean, less than 5000, 5000 dollars. Right. So, you know, and 100,000, I mean, that's obviously just the the monetary amount capturing the inconvenience that we mentioned and so on. And of course, the loss could be greater, so, I mean, I think 5000, that's a pretty I think a pretty compelling trade off. Right. And then what we find, right, it's so you can look at the economics that way, but it's sometimes it's a more practical ROI, right? The risk manager gets that first alert, okay, this thing works, right? What about the rest of my campus that isn't protected, right. I need to protect all things. So once you start getting into these these sort of cycle of alerts, then then it sort of feeds on itself pretty pretty quickly. 


Pete Miller [00:35:10] Yeah, that's a great point. Right. Success, you know, nothing breeds success like success. We just shift a little bit to Chubb then. Just how do you you decided to buy StreamLabs? How do you sort of look at it in terms of your resource resource usage, right, in terms of sort of keeping the construction and deployment, maybe of some of the tools or the efforts in-house versus outsourcing it to tech companies. Just in general, how do you feel, how do you think about that, Sean? 


Sean Ringsted [00:35:44] Well, I mean, there's considerable engineering and technical know how, that goes, goes into the sensors and the manufacturing. So the core intellectual capital and we have a number of patents around that, around the technology we we keep in-house. There are certain parts of the manufacturing, right, that we subcontract out. We like to stay close to the technology and so on. So it's all brought together and tested right at our facilities. Our software is proprietary. So, so we own that. So yeah, we like to like to stay close to the parts that matter, if you will. They're very, very important to us. 


Pete Miller [00:36:36] Yeah. I always think that if it's a core competence, then it makes you unique and probably not outsource that. So Sean, you've been a prominent advocate of the shift to predict and prevent. What have you learned along the way and what do you view as sort of the keys to success in this approach? 


Sean Ringsted [00:36:54] Yeah, it's really interesting, right? And again, I'd frame this from high level to when we think about IoT, you know, I think we're all use in when driving right. The concept of IoT for use based insurance and to help prevent accidents. You're starting to see it in in health care, right, and smartwatches, right, to sort of guide guide people with their their activities or even, you know, alert them, right, if there's a health event that could happen. So this idea of IoT starting to sort of help predict and prevent broadly, right. I mean I think it's here. It's only going to accelerate accelerate further. So I think there's a significant impact on the insurance industry. And as I mentioned at the outset, what it does, it gets you to real time exposure based thinking around risk prevention and pricing and so on, which I think is incredibly, incredibly powerful and provides the right risk incentives for customers and it allows insurers to sort of help with mitigation, but also to make sure that the pricing is proportionate relevant to the risk, which I think is fair and it's right. But particularly with the water-based efforts, right, in a similar way. Right. You're now starting to create data and you're starting to digitize a physical risk and it's providing underwriters insights and data and are clients the same thing that they that they just didn't didn't have before. And so, you know, whether it's a commercial or residential building, you can now have a much better sense of the exposure, how to think about mitigating water risk and and pricing for that. That just, I think, helps with the coverage and the type of product that we're offering. So I think it's incredibly exciting and you start to see it broadening, right, from just, you know, just being property. You think you go into liability and environmental, right, with the type of sensors that are now that are now here. So, yeah, I'm very, very optimistic about the the application of the of the technology for our clients and what it means for job in the industry. 


Pete Miller [00:39:24] Well, thank you, Sean. I really appreciate your time today. Certainly you've given us sort of a global, if you will, a high level view of how you see, predict and prevent working, and then helped us understand exactly how Chubb looks at this and has implemented it. And as always, Sean, I know I look to you as somebody in the industry is very forward looking and very strategic. And I'm really, really grateful for your time today. So thank you very much. I appreciate it. 


Sean Ringsted [00:39:53] Pete, it is always a pleasure to chat and always value your help and support. So thank you very much. And hopefully listeners found something in here that is useful for them. 


Pete Miller [00:40:03] I'm sure they did. I know I did. I want to give a huge thank you to George and Sean for joining me on this episode of Predict and Prevent. It was so great to hear their insider perspectives on how risk managers and insurers can successfully use IoT sensors to protect their companies and customers. And thank you for listening. I hope you learn something new in this episode. Stay tuned for more insightful conversations about the future of risk management and insurance. Predict and Prevent is a podcast brought to you by The Institutes. Subscribe on your preferred listening platform, and join us for future episodes where we continue to dig into this approach and the opportunities that come with it.