Home insurance providers are increasingly looking towards strategic partnerships with smart device manufacturers to utilize the Internet of Things (IoT) edge in winning customers, reducing claims, and improving combined ratios.
Some examples of the many partnerships in the market:
- Farmers Insurance partners with ADT to provide complimentary video equipment, discounts on monitoring services, and a three-year price lock of an ADT subscription.
- Travelers is aligned with Amazon; home insurance policies receive a free Echo Dot that can be managed by voice command with Alexa.
- Insurtech Hippo collaborates with a wide range of smart device partners such as SimpliSafe, Kangaroo, and Notion to cover end-to-end IoT home insurance needs.
- American Family partners with Neos, a U.K.-based insurtech provider whose majority owner is Aviva, to provide smart home services in Arizona and Washington.
Marketers have a key role in maximizing the success of these partnerships and contributing to policies won, claims reduced, and combined ratios improved. Here are some key tactics that marketers can use to align with smart device initiatives:
Determining smart device preferences
Understanding current and prospective policy holder interest in smart devices is crucial to successful messaging. Customer preferences can be fairly complex as those that already have certain smart products, such as a video doorbell, may be uninterested in making a switch to another provider.
Evidence of the complexity of intent can be found in an August 2020 survey by Security.org. Sixty-four percent of the survey’s 605 respondents intend to buy a smart home technology within the coming 12 months. Current ownership of smart devices found in home insurance offerings, such as video doorbells, smart home hubs, locks, and sensors, ranged from 14%-27%. Those intending to buy a new device in the next six months ranged from 8% for smart hubs and sensors to 16% for smart locks. There’s a sizable market for home insurance providers to capture while ensuring that messaging isn’t missing the mark due to other incumbent smart tech already in place.
Suggestions for marketers:
Review the opt-in/opt-out preferences for customer communications over the past 12-24 months alongside smart device uptake in policies. Analyze the extent that there is a correlation between changes in messaging options and utilizing a smart device. Survey existing customers to uncover the smart device needs that are currently in place among your customers and what may be of future interest. Map out the smart device content showcased on email, mobile app, and web properties and fine-tune when– if there is a range of smart devices available – to swap out a video doorbell for a smart hub, or a smart lock for a smart sensor.
Navigating data management dialogue
Home insurance and smart devices have significantly more complexity than other types of insurance when managing the IoT data management dialogue.
Much of the auto insurance innovation for IoT is centered around the mobile app (as outlined in a recent post). The mobile app is often built by the brand itself with a few key third-party providers to support the underlying infrastructure. Home insurance IoT has a wider range of access points, with devices manufactured and provided by third-parties, which requires a different approach to engaging on the topic of data management.
Sixty-five percent of the 2,500 U.S. homeowner insurance policyholders polled in a September 2019 LexisNexis survey indicated they are open to sharing data if it would provide more competitive premiums offered. Sometimes the data can be much simpler than customers with initially expect for securing discounts. Hippo takes a simplified approach to data management and makes it clear on its website: the only data received by Hippo is to confirm if a smart device is on or off to verify eligible discounts. Any data beyond on/off for a given device is sent directly to the user’s respective smart device portal.
Suggestions for marketers:
Collaborate with legal to make clear in insurance firm messaging the data-sharing expectations to secure premium discounts. Utilize the segments that have been developed from mapping out customer preferences for smart devices and test the clarity of messaging across customers. Analyze activity of those that are active smart devices users compared to those that have yet to buy a device and measure the extent that message clarity leads to a lift in policy applications and renewals across both groups.
Communicating during claims processing
Seventy-nine percent of those polled in the LexisNexis survey indicated they are open to connecting smart device data to insurance providers to assist in filing claims, a notably higher percentage than those willing to share data for premium discounts. Insurance companies continue to invest in flexible technology stacks that will enable greater volume and types of data into the claims process. Marketers should adapt messaging so that for customers that are open to data sharing for claims, it is as seamless of a process as possible.
Suggestions for marketers:
Assist customers in understanding how they can send over required data for claims processing from smart devices. Collaborate with claims management team on how the marketing team can be alerted when a particular claim is filed, such as water damage from a burst pipe, so that marketers can optimize content towards ameliorating the specific issue. Highlight to existing customers where data preferences can be managed to permit the extent of data shared proactively. A home insurance provider could receive water volume and temperature data when an incident is detected to accelerate claims processing.
Marketers as advocates
IoT innovation continues to unlock new efficiencies for the insurance industry. Marketers can play a key role as advocates for new partnerships to drive new approaches to growth. Insurance is a highly competitive industry with significant price sensitivity. Providing clear, targeted messaging on the economics of an insurer’s smart device partnerships in reducing incident and financial risk can be the difference in winning against slightly less expensive competing bids.