Insurance is the Succeeding Big Opportunity for Smart Home Adoption

By Insurance CIO Outlook | Tuesday, September 15, 2020

Insurance Smart home technology is racing into the mainstream and dispensing insurers with tools to enhance service and lessen claims.

FREMONT, CA: Consumers' attention on connected devices has been one of the critical drivers of innovation in the industry. Over the years, as the price of sensors mitigated, the number of IoT-enabled devices has developed steadily, and they have become more economical and viable. However, consumers continue to be wary of sharing and data privacy. The application of data collected from smart devices can be used across many other verticals, such as healthcare, auto telematics, and financial services. The ecosystem mainly comprises insurtech companies, insurers, technology providers, and smart device manufacturers. While it is essential that different stakeholders work collectively for rapid and meaningful growth of the market, initial estimates of growth have not been met.

Smart devices deployed in homes to detect risks contribute data about consumer usage and preferences. It can be efficiently used to design home insurance policies that are personalized and cost-effective. Most insurers are using financial benefits in the manifestation of discounts on premiums and devices or even complimentary devices to entice consumers. This is a simple strategy, and customers have expressed readiness to adopt smart home insurance in exchange for free tools or discounts.

To identify the real differentiator is based on how companies communicate and engage with customers. Data generated by users can be used by insurers to enhance customer commitment further, improve processes, and reduce costs. Use of advanced technologies such as Artificial Intelligence (AI), Machine Learning (ML), Big Data Analytics (BDA) and emerging technologies such as Blockchain and drones are expected to improve smart home insurance dramatically.

The main reason for adopting IoT is to create and consolidate knowledge about risks and customer base. This will lead to the next generation of products and enable further data monetization opportunities through the orchestration of an ecosystem of partners. The emergence of ecosystems of digital platforms delivers an interconnected set of services as an integrated experience to the customer.

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