Technology giant Apple and IoT start-up EVRTHNG this week announced significant partnerships with insurance companies, a sign perhaps that insurers are ready to face the disruption being brought about by the Internet of Things.
EVRYTHNG has launched an Internet of Things (IoT) insurance solution to enable insurers to design and deploy smart home insurance propositions.
The IoT smart products platform says the solution is built upon an ecosystem of pre-integrated devices, including high-profile partners such as Jasco, iHome, and First Alert.
EVRYTHNG claims the solution enables insurers to bypass the complexity associated with multi-vendor smart home environments. Instead, insurance companies can offer services under their own brand using any combination of manufacturer-branded devices.
For EVRYTHNG the unique selling point of this IoT insurance solution is that, unlike most ‘affinity’ or co-marketing programs, insurance companies will have complete access to all real-time data, control over the device ecosystem, and a customer-facing mobile app.
Disrupting insurance with IoT
In a press release, EVRYTHNG CEO Niall Murphy shared his belief that it is the home and property insurance market’s turn to benefit from the opportunities provided by IoT.
“Insurers can help consumers access the benefits of smart home safety and security, apply sensory data to offer proactive, personalized service and response, manage risk more effectively, and ease administration,” he said.
Curt Shacker, EVP for connected products at EVRYTHNG, added: “This is about providing insurance companies all the components they need to bring their own brand-led value to market.”
“Insurers can now get going quickly and easily with a staged program to pilot value propositions with customers with a specific set of devices…and then move to scale over time,” he said.
Do the pro’s outweigh concerns?
There are obvious potential benefits to an insurance company having access to your smart home data. They might be able to spot problems, such as burst pipes, and warn you before they arise.
This would save homeowners a lot of money, but there are concerns nevertheless – notably concerning data privacy.
To some consumers this whole business might feel too much like Big Brother, but for others the crucial question is how the technology will actually affect insurance premiums.
While smart home technology is one of the more advanced aspects of the IoT, the market is still nascent.
In research revealed late last year, Barclays discovered that 28 percent of homeowners would find a property more appealing if it had the latest home technology. Yet, that suggests the other 72 percent either wouldn’t or don’t care.
The point being that, while smart home technology might be beneficial to consumers, many are either unaware of the rewards or are reluctant to adopt this technology until they know more about what it entails.
Insurance companies bite back
EVRYTHNG might be trying to disrupt the market, but insurance companies will not sit idle.
American healthcare insurance company, Aetna, has just partnered with Apple to provide its members with a subsidized Apple Watch.
The watch will come kitted out with Aetna-exclusive iOS health apps. The companies say the aim is to promote health and fitness, so that consumers can manage their health and lifestyles better.
This is all part of a push to empower the patient through the digital transformation of healthcare – a theme at our recent Internet of Healthcare conference.
The hope is that, by providing patients with access to their health data, they will be incentivized to lead a healthier life.
It’s a simple concept and it does make sense but, as citizen health hacker, Tim Omer, pointed out, the patient is the problem.
Same old story or a golden future?
It’s a smart move by Aetna, which currently insures around 43.6 million people across America. The market potential for the company is huge.
But how many enterprises take this up remains to be seen, and it will be more interesting to see how long they keep it up. Consumers are fickle, and Apple admits that the watch is only expected to last three years anyway.
After a straw poll of our office, it’s clear most people here stopped using theirs after just three or four months.
It’s the same old story when it comes to data privacy, too. Possibly more so when it personal health is involved. How comfortable will users be with insurers setting rates based on very personal information?
To some this won’t matter. Perhaps the perk of a free watch and potentially lower health insurance will make consumers stick around.
Aetna has not yet stated how all the data it collects will affect premiums, though.
Is the IoT the next industrial revolution?
The stage is set for an interesting battle between traditional insurance companies and technology firms to see who can disrupt this space with IoT technology.
Greg Barats, CEO of insurance company Hartford Steam and Boiler, thinks insurers need to morph into becoming service providers to avoid becoming obsolete.
His company is investing in IoT start-ups in a bid to remain relevant, but not all insurers are as proactive.
“This is an industry resistant to change,” he told IoB. “I feel strongly as an industry that we’re in a race in customer proximity and the race is going to be with technology companies providing unique solutions and services.”
“The Internet of Things is the next industrial revolution and we need to position ourselves.”