Homes have been getting smarter thanks to sensor-based Internet of Things (IoT) devices that can do everything from monitoring the temperature to turning on the lights. But, like many other sectors, the smart home market has felt the impact of COVID-19.
To get the inside track on exactly how the pandemic has changed the rate of smart home adoption and what that means for the insurance industry, Notion, recently participated in a Q&A panel discussion “The Future of Smart Property & Insurance”.
As the panelists discussed how the emerging trends have been impacted and even accelerated by the pandemic, they began to home in on six key trends.
Click here to see the webinar.
Top Six IoT Device Trends Impacting Carriers
- Spending More Time at Home
From lockdowns and stay-at-home orders to people suddenly working and studying from the kitchen table, families now spend more time in their houses, apartments and condos than before the pandemic. That means added wear and tear on home systems.
Yuval Harry, vice president of partnerships with HIPPO, sees this as an opportunity for insurance solutions that leverage smart devices. Monitoring technology that can alert homeowners about potential issues such as leaks can help people keep on top of preventative maintenance and even prevent insurance claims.
- Increasing Comfort with Technology
Remote working and learning forced many people from office workers to schoolchildren to adapt to new technology almost overnight. This rapid digital upscaling has helped to change their perspective on the use of in-home digital devices.
“People’s experience and comfort level with technology in the last three months has increased dramatically,” said Liz DeVito, vice president of partnerships with HSB.
In fact, even the panelists acknowledged that being home for such an extended period has changed their behavior too.
“I see it with myself and my wife. We are using our smart home technology way more because we are here more,” said David Wechsler, executive director and general manager of the IoT insurance vertical group at Comcast.
- A Preference for DIY
Both companies and individuals are looking for ways to reduce their exposure to the virus.
Homeowners are reluctant to invite contractors into their houses for installations and repairs. As a result, the pandemic has accelerated people’s openness to emerging tele-maintenance services and products they can install on their own.
“There is a pretty dramatic shift to and a requirement for DIY,” said Brett Jurgens, CEO and co-founder of Notion.
- A Reassessment of Living Spaces
As people come to terms with the idea that the entire family will spend more time working and playing at home, their usage and list of needs has changed.
People who were considering downsizing not so long ago, are rethinking their house-buying wish lists to include spaces where everyone in the family can work, study and keep themselves entertained.
For some, that means a bigger primary residence. For others, it translates into a second home. The novel coronavirus has given many New York apartment dwellers the incentive they needed to look for a second, larger home with outdoor space in Connecticut, the Hudson Valley, or the Hamptons. In June, closings on condos in New York were down 74 percent. In the Hamptons, they were up 84% when compared to the same period last year.
“The new home away from home is going to be created through the COVID-19 pandemic,” said DeVito. “That’s going to be a driver that increases the need for smart technologies.”
The more houses people have and the bigger they are, the more work it takes to look after them. IoT devices, which can monitor everything from plumbing and other systems to whether doors and windows are closed, will help busy homeowners take care of their properties.
- Uncertainty About the Future
Even before the pandemic took hold, many people felt the next global recession was looming just over the horizon. In recent months, the pandemic shutdowns have had a devastating impact on the economy and caused skyrocketing unemployment.
People worried about job security and the economic decline are reviewing their household budgets and looking for ways to reduce their bills. Everything, including their insurance premiums, is under the microscope. Carriers that leverage smart technology to offer discounts or develop new products will be in a better position to compete.
- A Growing Spirit of Innovation
Despite innovative newcomers, the insurance industry has historically been slow to change and embrace the insights generated by new data and analytics. For some time, carriers have been sitting on the sidelines observing how the market would react to new technology. They were slowly considering if, how and when they should enter the market. Since the pandemic started, the speed of change has spurred corporate decision-makers to make commitments in weeks instead of months.
Wechsler is confident “the connected home will become a very big part of the insurance ecosystem.” He predicts insurance companies will bundle policies with monitoring technology to lower a customer’s risk profile. It is something he sees already happening in other parts of the industry. For example, Tesla customers can bundle their auto insurance when they buy a car. The future, he says, will be about selling a portfolio of benefits that makes the home easier to run and includes everything the customer needs for protection.
The insurance industry must keep pace with customers’ evolving needs. Smart home monitoring IoT technology provides some part of the answer because customers are increasingly open to adoption. It offers three vital benefits — reducing perils, gathering valuable data, and providing the insights carriers need to help customers manage their homes and avoid claims. Lower loss ratios and better data insights will empower carriers to offer new products and competitive premiums without impacting margins.