2020 and 2021 have been a whirlwind for carriers as they navigated through a pandemic, a boom in the housing market, and severe weather events causing higher rates of loss.
It's also no surprise to anyone that since the beginning of the pandemic, technology has also become a greater part of our lives. As the workforce began to work from home, consumers were drawn to anything that could help them stay connected, even smart home devices that make their properties more convenient to manage. According to research by Parks Associates, 34% of all single-family households own a smart home device, and the number is growing.
Many insurance carriers have noticed the trend and are bundling smart, self-monitoring IoT technology with insurance coverage to encourage customer acquisition, improve customer engagement, and reduce the risk of loss.
Why Smart Property Monitoring?
Smart property monitoring is a win-win for insurance carriers. It combines the benefits of IoT and smart technology with property insurance. Blending IoT and insurance provides homeowners with a DIY home monitoring program at a discounted rate and prevents loss for insurance carriers.
Huge Value Proposition for Customers
Smart home monitoring gives home and business owners a centralized platform for home monitoring. COVID-19 has brought people's lives into their homes, and the use of smart home devices is increasing as a result. In 2020, about 34% of homeowners had a smart home device, up from only 9% in 2014. This trend has only continued to grow, with forecasts estimating 75.44 billion IoT devices will be installed worldwide by 2025.
Fewer Claims for Insurance Carriers
The insurtech model reduces loss for insurance carriers by alerting their customers of preventable environmental-related property damage. For example, water damage is the most common cause of insurance claims, and the average cost of a claim is high -- $11,000 for home owners, and even higher for SMBs. With easy-to-install IoT technology on the market today, property owners can get notified of water issues, and more, before they cause damage. Automation through smart home devices can cut the cost of the claims process by as much as 30%.
How To Innovate With IoT
Carriers looking to jump on these trends in IoT technology should keep a few things in mind in order to innovate and adapt effectively.
Partner With a Product That's Interoperable
Notion customers aren't tied down to restricting devices to one brand when they want to add smart sensors, lights, locks and other smart devices in their homes. By integrating with IFTTT, HomeAdvisor, and more, Notion allows property owners to get more out of any additional smart home technology through integrations. Interoperable devices let property owners benefit from IoT by having all their technologies communicate data with one another and even respond to inputs from them.
Build Trust by Addressing Privacy Concerns
It's important to explain to customers as you go that they have data privacy. Remind customers that you're the only one who can pull their data and that you'll only do so when specific data is needed for a claim.
Focus on User Experience
With many consumers preparing to head back to work, smart home technology makes it easy to understand what's going on around the home. Users can have peace of mind, no matter where they are.
Additionally, with smart property technology, renewal, or a claim, carriers can set up additional positive touch points to remind consumers how to take proactive measures to de-risk their properties. Carriers such as Hippo and Nationwide are leveraging partnerships with Notion to give customers a high-tech experience and emphasize the importance of home health.
The power of notifications when things go wrong, combined with additional positive touch points, help to reduce size and severity of claims for carriers and drive long-term customer engagement and retention.
Smart Home Innovation Is a Win-Win
In today's environment, carriers taking on an insurtech-driven approach can stay competitive with improved customer acquisition, retention, and lowered loss ratios. And with smart devices providing data to both parties, customers can better prevent property damage while helping carriers reduce loss. It's a win-win.
Want to learn more about how Notion helps carriers reduce loss and improve retention? Learn about our partnership program here.