IoT for Insurance: Tech savvy homeowners disconnected from insurers
What do home buyers understand that their insurance companies don’t? Most Americans have begun investing in forms of ‘smart’ technology for their homes. A recent poll from HIS Markit found that last year 80 million smart home devices were delivered worldwide with an additional 130 million smart home devices expected to be shipped this year.
More often than not, American home buyers and realtors are expecting home technology to be part of listings, particularly in Baby Boomer and Gen-X segments. Despite this data, insurance companies are absent from promotion, evaluation, and/or recommendation of connected home solutions. There is an opportunity for insurers to meet tech- savvy homeowners on the digital journey and build credibility while improving performance.
“Anyone who has accessed the website of a major insurer to investigate or renew a property or casualty policy over the past 20 years recognizes that the global insurance industry is not at the vanguard of digital innovation.”
– IBM Institute of Business Value / 2017 Report “You, me or us?’
Every open window is data
Connected homeowners and their digital data provide a new ‘window’ into habits and experiences. And it’s with this data that we can not only learn what policyholders do each day, but adjust our risk models, pricing and engagement into something that offers proactive and preventative engagement versus reactive and expensive claims. Digital data, coupled with weather data, allows insurers an opportunity to learn, think and (potentially) intervene for an open window in a rainy day versus a clear day. Finally, the digital data lets us see each policyholder, in context. Which means we can adjust our engagement and risks based on history or environment.
How insurance companies can engage each policyholder
Homeowners and their digital data allow us to reinvent old risk models and apply new ideas and analytics to each policyholder’s profile. Furthermore, we can use this data to provide valuable feedback to them (i.e. engagement). That then helps them avoid risky situations and behaviors, and shifts the very nature of risk. What insurance company doesn’t want to reduce their risks?
Harnessing the homeowner
As more insurance consumers connect their homes, move online to interact, compare products and prices, and make purchases, the volume of available data is increasing exponentially. As first movers among insurers create new business models /product and harness the potential of their data, those that wait will be at a significant competitive disadvantage. We’re also changing the relationship whereby customers allow real-time data and monitoring in return for greater personalization and service. What client would decline value-add services from their insurer?
To learn more of how IoT changes your potential and profits as an insurer, please visit our IoT for Insurance pages.