Parks PointsThe IoT Consumer and Insurance
by
Brad Russell |
Smart home and consumer Internet of Things solutions promise significant opportunities for the insurance industry in terms of reducing costs, alleviating risks, deepening customer engagement, and creating new services and revenue streams. There are many barriers ahead to overcome, but given the tremendous upside, insurance companies have begun attacking these challenges with a multi-tiered strategy. The currency of these opportunities is data, and the level of integration required to realize the insurtech vision and enhance aspects of the insurance business is a huge undertaking. It requires collecting massive amounts of unstructured data from a variety of connected sources. The requirements for substantiating requests and implementing regulatory changes to policies and pricing will the involvement of thousands of homes with active devices, control groups, and multiple sources over a period of years for corroboration.
IT Transformation Ahead Finally, integrating that data into the daily workflows of underwriting, claims, customer service, and product development will require the transformation of all related back-end systems. In light of these challenges, insurance companies have begun developing both short-term and long-term IoT strategies:
Insurers have taken a variety of progressive actions to leverage IoT for marketing and sales. For example, State Farm has a dedicated Web page that includes educational content and special offers for specific security products and monitoring solutions. Travelers has offered several special offers from August Home, Canary, Roost, Vivint, Piper and Nest Protect.
Consumer Awareness Efforts Consumer awareness actions on the part of top insurance companies include the following:
Partnerships in the insurance areas leverage data from smart devices to enhance customer benefits and awareness, including providing more transparency around premiums, personalizing policies, and reducing risk for customers. For smart home players, partnering with the insurance industry can help extend the value propositions of their solutions, in addition to driving adoption. Among U.S. broadband households, there already is considerable consumer interest in smart home solutions. Currently, 26 percent of U.S. broadband households have at least one smart home device, and more than 50 percent plan to buy a smart home device in the next 12 months.
System Integration Large players may negotiate and manage a variety of relationships with data collectors, but medium to smaller players will require an intermediary to manage the task. Of great benefit would be a standardized schema and app tool for sharing insurance-related data points with one's insurer. Consumers are ready for such advances:
Security and safety are key drivers in smart home adoption, and they can serve as a broader force in integrating all areas of the smart home. In the end, all parties, including the consumer, benefit when the rich data sets generated by smart home solutions are accessible across categories. As technology continues to advance, more progressive actions will occur around the operationalization of IoT, including more VC investments, employee trials with connected devices to help define data collection aspects, and pilots with small groups of homes. The process will not be easy, but both short- and long-term benefits will make these efforts worthwhile and ultimately rewarding. This article was published on E-Commerce Times.
Brad RussellResearch Director, Connected Home INDUSTRY EXPERTISE: Connected home technologies and services, IoT data privacy and security, home networking, insurtech, connected health, housing innovation, home energy management Brad leads Parks Associates’ connected home team, exploring leading-edge issues converging in the connected home—smart home devices and services, residential security, home networking, IoT data privacy and security, data-driven applications, and platform services. Brad’s custom research work includes market sizing and forecasts, ecosystem and competitive landscapes, channel analyses, and go-to-market strategies.. Brad balances the art and science of market research to generate insights that lead to more astute business strategy and value-generating practices. He has a background in marketing communications, technology startups, and online media. Brad received his Bachelor of Science degree in advertising and marketing from the University of Texas at Austin. He also earned a M.Div. and a D.Min. with concentrations in ethics and cross-cultural collaboration. |