IoT Research: Consumers Will Switch Insurance Providers to Obtain Smart Home Products
DALLAS — Nearly 40% of broadband households in the United States with an insurance policy would switch providers in order to obtain smart homeproducts as part of a new insurance service, new research by Parks Associates shows.
Titled “Insurance Opportunities in the Connected Home,” the report also notes that more than 80% of those likely to switch insurance providers are also likely to purchase smart home products with prevention features.
“Insurance companies that are prepared to enter the IoT space will be able to capture new market share by luring consumers already in the market for smart home devices,” says Brad Russell, senior analyst, Parks Associates. “Some innovative insurers are already offering free or subsidized smart home devices in marketing efforts, but they will need to make investments in order to have the technological capabilities to collect and leverage the data to realize the full value of these devices. Both short- and long-term benefits in new services and customers will make these worthwhile.”
Parks Associates notes that insurance providers have the potential to mitigate risk, deepen customer engagement, and develop new revenue streams from smart home products and services in the home. Insurance providers can attract new customers and develop new revenues with new smart product offerings, as well as offer home inspection and maintenance services that could generate new revenue while reducing claims. The study measures consumer preferences for various pricing, financing, and incentive options.
“Currently, smart home offers from insurance companies chiefly appeal to those already interested in smart home products and services,” Russell says. “Both insurance companies and the broader consumer IoT industry will benefit by raising awareness of how damage detection and prevention solutions can save money and increase safety.”
Parks Associates research has consistently revealed safety and security as the key drivers in smart home adoption. Thus, consumers will respond to solutions that secure their homes’ value and ensure safety of loved ones, Russell explains.
“Insurance Opportunities in the Connected Home” assesses consumer interest in using smart home products to detect and alert them of potentially damaging property conditions and safety/security hazards. In addition to demographic analysis, the study segments interested households by their interest in new insurance models and channels.
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