The Internet of Things can’t predict all circumstances of the future, but its aggregate data can encourage proactive ambitions. Such has been the case with insurance companies looking to sensor data for consumer truths, the insight needed to provide more accurate rates and appropriately resolve claims. Progressive Corp. was an early adopter of IoT technology, promoting its in-car tracker Snapshot to see how many miles its customers really drive on a regular basis. Now property insurance providers are hoping whole-home automation suites can not only lower rates, but prevent claims altogether for fire and flood damage.

Powering monetization opportunities in IoT for the insurance sector is ROC Connect, Inc. With a white-labeled smart home platform, ROC puts the insurance company at the center of whole-home automation. Leveraging consumers’ existing relationships with insurance providers, ROC is rolling out customer service improvements and deeper discounts through IoT. A step towards providing insurance providers better analytics, ROC recently announced a team up with mnubo, an analytics engine. 

Explaining the business perks and monetization opportunities for ROC’s more promising verticals, the company’s SVP of Business Development Kevin Meagher details the recent developments where IoT meets insurance. 

Bridging corporate and consumer IoT

Q: How is it being a liaison between corporate and consumer for new age tech such as the IoT?

Meagher: We’ve become more aware of the insurance industry’s challenges and they’ve become more aware of IoT, and innovating in this space. Previously insurance companies had a very narrow focus. They have this interesting relationship with consumers where they have a once-a-year conversation, always about price, haggle and someone’s usually unhappy. And then pray they’re never going to talk again because if they do it’s bad news (a claim).

IoT can give insurance a real opportunity to move from being entirely reactive to problems in the home to being proactive, selling products and services that mitigate risks.

Is IoT money in subscriptions?

Q: Many legacy industries are seeing IoT opportunities in subscription business models – is that the case with insurance?

Meagher: I’m not sure insurance companies can get additional revenue from subscription services. I see them making money in a bunch of different areas. One example is risk reduction that can provide more savings than a subscription for $5 or $10 a month. This is about bundling value -added services.

If my insurance company bundles, there’s reduced losses to the insurance company, reduced churn (avoiding high customer acquisition costs), ultimately attracting new customers with competitive bundles. I wouldn’t write off the potential to monetize services, but those getting monetized will be more exciting, like whole-home warranties. In the age of IoT, when I can access appliances, I can bundle those and deliver more effectively.

Q: Where are the business opportunities for insurance in IoT, and what challenges do they face?

Meagher: I would suggest the key to the smart home is aggregating data, and insurance companies can do this.

We hear about companies coming together to tackle the problem of interoperability – it is not technical. We don’t need more standards. The problem is business models. Companies are fighting to become the standard. Bringing devices to market deliberately to not work with others. Nest (Alphabet, Inc.) doesn’t play fair – it came to market as a stand alone device. What consumers want is interoperability. A hub in the home can solve interoperability 90 percent of the time, collecting data and sending it to the cloud, as long as open standards are being used.

The platform we’ve developed is very much around open standards, giving an insurance company the ability to link together data from a thermostat, water shut off valves and fire sensors, pull them all together in a common interface and let the insurance company brand it in their name, so the customer feels the insurance company is providing these services.

More trusted than they know

Q: Similar to the telecom industry, the insurance sector is leveraging existing customer channels for new IoT business. How can they succeed? 

Meagher: I don’t think insurance companies realize how trusted they are. The business model of cable providers for smart homes is, they took security and layered it atop existing services (broadband, mobile, entertainment). This [model] is largely focused on security.

Insurance companies aren’t always popular, but they don’t realize how much their brand could logically stretch into IoT. Would you consider getting a smart home service if your property insurance provided a discount? Big losses come from fire and flood, so what they really want you to have is connected water shut off valves and fire detectors. 

How can insurance incentivize homeowners? Not as sexy as smart home controls for learning thermostats. If you have leak detectors, I believe you’ll start to see significant discounts (15-20 percent).

This is so easy to do, there’s no way this is not going to happen. It won’t be long before every fire sensor in the country will be linked directly to the fire station.

photo credit: Lantern House [Explored] via photopin (license)