Why insurers need to raise awareness for certain smart home tech products
Why insurers need to raise awareness for certain smart home tech products | Insurance Business America
Property
Why insurers need to raise awareness for certain smart home tech products
Consumers are not aware of the cost saving benefits of these devices
According to Jeff Wilcoxon (pictured), VP of strategic partnerships at Nationwide, most Americans are unaware of certain smart home devices, mainly water and fire sensors, and how they can both minimize or avoid a loss.
“Consumers have a lower awareness for these devices because they’re not actively thinking of the types of incidents associated with water and fire sensors,” he said.
“They don’t think about the devices preventatively as we would like them to, or how they can benefit them. If the loss event does occur, then we see a lot of higher adoption of those technologies because they don’t want it to happen again.”
In an interview with Insurance Business, Wilcoxon spoke about why the current economic climate can lead brokers to leverage these cost-saving home additions with consumers and how to have those discussions. He also revealed information about Nationwide’s partnership with smart home tech company Resideo.
Creating consumer trust
A recent study conducted by Nationwide examined Americans’ awareness and adoption of smart home tech, with a significant number of respondents owning smart video doorbells — such as Ring — and smart home security cameras (34% and 32%, respectively).
Meanwhile, the top priority for US homeowners who either own or do not own these devices is making one’s house safer (60%/42%) and more protected (60%/48%).
Additionally, the most recommended devices by brokers to insureds include smart sensors that detect carbon monoxide (56%) and smart locks for doors (54%).
Lower on the list of most recommended by brokers includes the two products Wilcoxon is most enthusiastic about, including the smart water sensors to monitor flow and leaks (25%) and electrical fire hazards (48%)
“Only 9% of respondents use smart sensors that can monitor water leaks, even though the average cost of water damage is $12,514,” he said.
“Meanwhile, the average fire claim is around $83,000, and the devices can help mitigate such an extreme loss.”
Brokers can recommend these devices to help build consumer trust and retention, especially as economic uncertainty causes homeowners to shop around for cheaper insurance or better risk management advice to help avoid a potential loss.
“People are very value-oriented now,” Wilcoxon said.
“If you can’t reduce costs, and you are looking for ways to mitigate risk or save money in any way you can, this is a prime opportunity for brokers to take advantage of.”
Instead of being viewed as a purely transactional agent in the insurance experience, brokers can flaunt their advisory insight to help ease consumer anxiety and create a safer home in the process.
Initiating these conversations with consumers
According to Wilcoxon, these types of devices are still in their early days and have come a long way since they were initially received by carriers with a tepid response.
“I would say that smart home is where telematics for auto was four years ago. It’s kind of the Wild West still,” Wilcoxon said.
“However, many Americans have residual devices in their homes already. Some of them are connected. If they’re already using those devices, maybe their agent doesn’t even know about it, and they can be eligible for another product.”
A broker can start by discussing what is already installed and what is available on the market, while using data and analytics to inform the insured about potential threats to the home and their costly outcomes.
“We want to be able to bring peace of mind to our customers while also giving them options to save on money, if possible,” Wilcoxon said.
A forthcoming partnership
In a push to further refine and augment its smart home solutions, Nationwide has partnered with Resideo — a sibling company to Honeywell established in 2018 that offers smart home devices and systems — to help make these technologies more accessible.
“Since we already have smart home products to offer our customers, this partnership will extend those capabilities to solve important problems homeowners face,” Wilcoxon said.
Still in its preparatory stage, Wilcoxon said that consumers will get to choose from a set of packages and bundling options to protect them from high frequency perils while also introducing newer devices into the household that can also be beneficial.
“We will make sure that we provide packages that we think makes sense for the majority of customers to start with, and then change it over time as consumer demand and concern evolves,” Wilcoxon said.
The packages are set to be released in 2024.
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