The connected home: The next frontier for P&C insurers?

Insurers must look at connected homes and ask: What role do we want to play in this new ecosystem, and how do we want to engage our customers? (Photo: Shutterstock/Horoscope)

The Internet of Things (IoT) could bring to life the once fabled automated home that those of us old enough to know, saw portrayed on our TV screens when the Jetsons were all the rage. As reality catches up with fiction, IoT has the potential to transform P&C business models and business offerings,  potentially changing the very notion of what an insurance company means to consumers and what its role is in their lives. In our previous article, we presented an overview of coming IoT changes, including the shift of insurance premium mix from auto to home with the likelihood of technologically advanced automobiles reducing the frequency of accidents, and as shifts in consumer behavior and demographics suggest that car ownership and usage may trend lower. In this article, we dig deeper into how insurers can use the connected home as a significant revenue generator and as an entry point into other products and services

Over the next decade, the IoT is likely to penetrate quickly, connecting half of all U.S. households, filling them with data and interaction. Today your house can send you a text when your pipes spout a water leak—tomorrow embedded sensors could trigger an automatic shut-down, while generating a work order for the neighborhood plumber.