ATLANTA — A new LexisNexis® Risk Solutions study on the Internet of Things (IoT) released today found that the vast majority of smart home device owners (78%) are willing to share data from devices with their insurance companies to assist in policy pricing, but most (65%) would only do so if offered a discount or incentive. The study unveiled that discounts might offer the push needed to persuade existing smart home device users to share data, but they are less effective for those consumers who are not currently using or considering a purchase of smart home devices.
LexisNexis Risk Solutions conducted the study to evaluate consumer attitudes around participating in smart home programs through their insurer and to help insurance carriers identify the business implications of the growing number of smart devices used in homes today. While the rate of smart home device adoption is increasing, the creation of smart home insurance programs has yet to meet policyholder desire to use these devices and their data for discounts.Consumers have demonstrated a willingness to purchase home automation devices for the right insurance incentive, and have an interest in hearing from their insurer through smart home platforms:
Coming out of the study, the top consumer motivators for owning smart home devices include increased safety/security (47%), the convenience of managing devices remotely (31%) and reducing energy bills/saving money (25%). Top barriers to owning include perceived cost of the device (58%), lack of perceived need (42%) and privacy concerns (26%).
While consumers continue to adopt IoT devices at an accelerating pace, awareness of smart home insurance programs is limited. Insurance carriers have a unique opportunity to further increase adoption rates among consumers by highlighting the core benefits of owning common smart home devices.
“It’s clear that consumers are ready and willing to bring insurance into their home automation experience for the right incentive and interactions,” said Dan Davis, Director, IoT at LexisNexis Risk Solutions. “This insight creates an opportunity for home insurance carriers to continue the investments they are making in this space to further boost adoption, provide additional benefits to policyholders and drive engagement, loyalty and possibly better pricing.”Recommendations for Home Insurance Carriers
Increasing marketing efforts around existing programs, including cost savings and extended coverage in the form of alerts and early detection can also help drive awareness and participation – particularly among those consumers who already own a smart home device. To get started, carriers can talk to customers to gain insights, offer meaningful incentives like insurance discounts and event intervention alerts, and develop better understanding of the value of specific smart home devices and data sharing for their target customers.
“A great starting point for insurers is to identify smart device owners at the time of quote and begin building a complete view of the homes they are insuring. This will drive business intelligence for carriers who want to understand the potential impact of a smart home program on their book of business, and eventually enable more tailored product offerings,” said Davis.
For complete findings, download the LexisNexis Risk Solutions Smart Home and Internet of Things Consumer Research Report whitepaper.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data, sophisticated analytics platforms and technology solutions to provide insights that help businesses across multiple industries and governmental entities reduce risk and improve decisions to benefit people around the globe. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit LexisNexis Risk Solutions and RELX.