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What opportunities do smart homes provide for insurers?

Carriers are in the early stages of exploring the connected home 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.

By Cindy De Armond, John Mulhall | Updated on May 18, 2015
At a more sophisticated level, the insurer can offer a data recorder to be installed in the home to track temperature, humidity, wind speed and mechanical vibrations.

The global connected home market is big and getting bigger. By 2016, it is expected to reach $235 billion, with the largest revenue-generating segments including home security ($110 billion), smart utilities ($33 billion) and home entertainment ($68 billion). Connectivity is popping up everywhere, from smart refrigerators that can monitor food consumption to smart carpets that provide notification of unauthorized entry. 

For insurers, the connected home can provide value in the form of new insurance models and products—based on deeper insight into the customer’s needs—and a higher level of customer satisfaction derived from dynamic risk monitoring and improved claims handling. The connected home also creates opportunities for insurers to lower costs and improve operational efficiency; insurers can leverage data from connected home devices to assess and mitigate risk, increase pricing sophistication, and offer new products, all of which help drive operational efficiency and top-line growth.

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