InsurTech News: Smart Homes and Insurance for the Win-Win
Smart homes provide opportunities for more personalized insurance and better client service.
The number of U.S. smart homes grew to more than 15 million—or 12.5 percent of total U.S. households—at the end of 2016, according to a report by Kagan, a media research group within S&P Global Market Intelligence. In 2021, that percentage was forecasted to grow to 28 percent or 35 million.
Simple smart devices, such as sensors that detect water leaks or smoke/CO2 detectors that insurers can offer to their clients, provide more comprehensive coverage because they warn of impending danger or damage.
Smart technology can also help homeowners settle claims faster because built-in features help insurers easily assess the damage and decide what to cover.
Smart Home Insurance Strategy
The more homeowners rely on smart technology for their homes, the more insurers should develop a smart home insurance strategy to support their clients. Smart devices can strengthen and change the relationship insurance companies have with their customers, offering an opportunity for insurers to become truly client-focused and capitalizing on InsurTech as the key to achieving this.
As the industry shifts, fewer people will file claims, but insurers will continue to support using new technology designed to detect damage and prevent losses.
So how can insurers become more client-focused as the opportunities for interaction recede?
How can they stay relevant as smart systems and advanced smart features make their jobs easier?
Client Focus Improves with InsurTech
That’s where InsurTech comes in. Insurers can leverage the Internet of Things (IoT) to remain relevant and to interact more frequently with homeowners and renters. The available data from smart homes and the IoT can help insurers provide better products and services. With a deeper understanding of customers’ needs and habits, insurance providers can offer more personalized coverage and underwrite risk more accurately.
The traditional relationship between insurer and client is characterized by high relevancy but a low frequency of interaction, says Matteo Carbone, insurance industry strategist. The emerging relationship initiated by smart home technology means service providers can help the client prevent the risks to his house and be proactive in limiting and fixing damages.
While this benefits the client tremendously, it also reduces their interactions with the insurance provider even further. Monetary reimbursement would only occur when the insurer’s service fails.
Counteracting reduced interaction with clients would mean thinking of clients as more than policyholders, insureds, additional named insureds and claimants.
And isn’t that what we aim to do? Serve people, not data? Sure, data can and should be used to serve people better, but at the end of the day, it’s real individuals and families who benefit from insurance. These people—not the data—are our clients.