Automated Home in Insurance - Thematic Research

Automated Home in Insurance - Thematic Research

Summary

GlobalData estimates that the UK smart home insurance market is worth GBP180 million ($220 million), which equates to just 2.8% of the current home insurance market. Given the openness to interpretation of a “smart home,” GlobalData predicts that the market could be worth up to GBP3 billion ($3.64 billion) by 2026 (48.1% of the household insurance market). Yet the prevalence of smart devices across households will determine the size of each country’s automated home insurance market. According to these conditions, the US automated home insurance market is the largest and most advanced.

Consumers have been able to derive numerous benefits from installing smart devices into their homes, with leading advantages including energy efficiency, home security, and lifestyle comfort. The scope for these devices to mitigate and minimize the impact of various types of claims within the home line has become increasingly apparent. With insurers grappling with ever-growing claims costs in the household insurance market, encouraging consumers to install these devices will alleviate huge pressures on players' bottom lines. This report examines the impact the automated home is already having on the insurance industry and considers the future outlook for this theme.

Scope

• The key benefit of smart devices to insurers is the mitigation and reduction of several key claims areas, including escape of water, fire, and theft.
• The data created and processed by smart home devices could open the door for big tech companies and other affinity providers to become disruptors in the home insurance landscape, although for now this is some way from coming to fruition.
• Leading smart home insurance providers offer discounts firstly on the devices themselves via partnerships with manufacturers, and secondly through discounted home insurance premiums to incentivize uptake and correct usage.

• Determine the extent to which insurance providers can benefit from smart home technologies.
• Identify the key challenges and opportunities arising within the automated home space.
• Develop strategies to encourage uptake among policyholders to benefit both yourself and your customers.
• Benchmark yourself against the progress of leading insurers within this developing sector.