In previous posts, I’ve discussed the potential presented to P&C insurers by the connected home. Insurers determining where and how to invest should keep these considerations in mind:
- Data. Insurers need to consider which data points are of most value and which have the highest predictive potential. They should be planning how this data will be obtained, organized, stored and accessed, and whether the current organizational capabilities are up to the task of leveraging these new data sources.
- Product Integration. Once data issues are addressed, insurers need to think about their connected home product strategy. Insurers can simply roll out connected home offerings as a distinct service from the product coverage, as a way to improve customer experience and intimacy. As carriers gain more insights into the risks from the connected home data, they can integrate the connected home product into the pricing and coverages they provide, particularly for higher risk segments of the market.
- Security and Privacy. Insurers should see if customers are willing to disclose personal data as provided by sensors, video cameras, motion detectors and other devices. With data collected from multiple sources, insurers need to determine whether current safeguards are sufficient to protect customers’ privacy.
- Loss Mitigation. As the use of in-home systems and devices becomes more widespread, insurers should set targets for reductions in the number and size of losses. The new data delivered by such systems and devices will not translate automatically into specific, targeted loss mitigation programs.
Our recently published point-of-view, “The Connected Home: New Opportunities for Property & Casualty Insurers,” defines a five-step path to success for insurers contemplating a move into the connected home market. Please click below to download it. In summary the connected home is quickly becoming a global phenomenon, and the opportunities to P&C insurers are enormous. Data provided by an array of connected devices will help transform insurers’ underwriting and risk avoidance models—and create new revenue opportunities for carriers able to offer real value to the customer.
- Read The connected home, Part 1: Finding the right value proposition for customers
- Read The connected home, Part 2: The value proposition for insurers
- Read The connected home, Part 3: Potential new service offerings
- Register to download, The Connected Home: New Opportunities for Property & Casualty Insurers