Carriers are actively exploring the connected home market, but they’re still in the early stages.  Most have yet to decide what strategy to take, and where and how to enter this market.  They may consider partnering with companies that already have applicable technologies, or coming to market with their own version of technology under a “white label.”

Take the case of one of the most basic connected home offerings:  safety and security. New wireless and machine-to-machine (M2M) capabilities allow for remote monitoring of the home and remote activation of home alarm systems, locks, indoor/ outdoor lighting, smoke alarms, water leak detection devices and even doorbells.

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One approach is for the property and casualty insurer to partner with the security provider by offering policy discounts to customers who install and maintain such systems, or by offering discounts on the system installation itself.

At a more sophisticated level, the insurer— either in partnership with a security provider, or on its own initiative—can offer a data recorder that can be installed in the home to track temperature, humidity, wind speed and mechanical vibrations as they affect the house.

The customer can benefit, not only from lowered premiums resulting from better risk monitoring and quicker action in case of an adverse event, but from increased security and peace of mind.  The insurer, in turn, gains a better ability to price the policy and an opportunity to mitigate risk and reduce claims losses.  With the average claim for a residential fire at more than $35,000, the opportunity for claims reduction can be significant.

In my next post, I’ll look at possibilities for using the connected home to expand beyond insurance.

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Cindy De Armond

Managing Director, Accenture P&C Core Platforms Lead for North America

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