April 4, 2017 by Canadian Underwriter
More than 80% of homeowners insurance carriers in the United States believe that smart home and Internet of Things (IoT) technology will attract new property and casualty customers and improve customer relationships, according to a new report from NTT DATA.
The IoT Disruption and Opportunity in the U.S. Insurance Industry research report was released on Tuesday by NTT DATA, a global business and IT services provider. While the report found that 83% of U.S. homeowners insurance carriers believed smart home and IoT technology will attract new P&C customers and improve relationships, it also found that more than two-thirds (68%) believe that the inability to gain access to data from smart home devices will “remain a major hurdle to finalizing carrier programs nationwide.”
“While enthusiasm for and investment in the smart home ecosystem is high among carriers, major challenges still exist in its evolution,” said Normand Lepine, senior practice lead, insurance data and analytics for NTT DATA, in a press release. “If carriers are to realize the anticipated benefits of smart home technology, they must first lock down the necessary business capabilities for adoption including data analytics and data security, and find partners with proven IoT capabilities to help them prepare to deliver innovative services and products to their homeowner policyholders.”
For the survey, NTT DATA surveyed more than 1,000 U.S. homeowners online and over 100 insurance carrier executives involved in decision-making, budgeting, strategy and execution, the release explained.
Among the key study findings was that carriers must confront the “perception gap” that exists between themselves and consumers when it comes to policy protection, security, price and IoT. The study found that more than triple the percentage of carriers (55%) versus customers (16%) want to be signed up to smart home programs and policies; almost double the percentage of carriers (72%) than customers (37%) believe the customers feel protected by their homeowners policies; and 77% of carriers compared with 31% of customers think insurance companies really care about improving customers’ safety and security.
The study also found that there are numerous “unknowns” that make it difficult for carriers to finalize smart home programs: 68% of insurers cite the inability to gain access to data from smart homes; 62% cite building analytics into the carrier underwriting process; and 55% of insurers cite the expense required to purchase and install devices.
Regarding IoT, 87% believe it will improve customer relationships, 83% see it as an opportunity to attract new customers and 74% believe it will “have an important influence on future products and services.”