The past few years have shown an uneven (yet inevitable)transition to a more internet-connected lifestyle.

Consumers buy more smart devices each year — from kitchen appliances, lighting and sprinklersystems to smart cars and wearable devices — and manufacturers keepcreating new ones. While some may not have noticed it, connectedsensors already stitch together whole swathes of our economy.

As is often the case with transformative change, these advancesalso involve risk. Understanding that risk is important tomaintaining and building customer relationships in the future.

Promise and risk

To examine attitudes across an increasingly connected landscape,Assurantrecently conducted a comprehensive survey of U.S. consumers.Overall, the study, titled "Connected Future: Navigating Promise andRisk," found that connected technology's leading benefits(cited as savings, enjoyment and peace of mind) are alsoaccompanied by anxiety and uncertainty. 

To better understand these concerns and what they mean toinsurers, it's helpful to start by distinguishing between the typesof consumers who purchase connected devices, as not all consumershave adopted the connected lifestyle at the same rate or for thesame reason. We identified five categories of consumers, listedfrom most to least connected:

• Technophiles (5 percent) embrace all kinds ofconsumer tech innovation.
• Home protectors (12 percent) find peace ofmind with connected control.
• Convenience seekers (21 percent) have autilitarian interest in chore reduction.
• The entertained (24 percent) selectivelychoose a few engrossing products.
• The unconnected (39 percent) use a minimum oftech products, and do so reluctantly.

However, as noted, determining these categories is just thefirst step toward better understanding connected consumers.

Related: Connected world 2030: Utopia ordystopia?

There's a palpable fear of the risks of being connected. Thegood news for insurers is that value-added services can helpovercome this reticence. (Photo: Shutterstock)

Complex groups

Digging deeper into the data reveals that each group is morecomplex than what initially meets the eye. For example, "theentertained" are more likely to be women, despite manyentertainment devices (e.g. video game consoles) tending to beskewed toward a male audience.

It is also surprising to discover that the wealthiest consumers,the most connected and those focused on entertainment, all fallinto separate categories. "Home protectors" are the most affluent,but on average own less than half the number of connected productsas the "technophiles" (7.6 compared to 15.5). Additionally, "theentertained" own the second lowest number of connected products,contrary to the general association of connectivity andleisure/entertainment.

The study also revealed that age has a significant impact onwhich benefits of connected living are valued most. Respondents aged 65 and older benefit most fromthe savings and peace of mind they get from connected technology.Younger adults tend to value convenience and teens are more likelyto relish technology purely for enjoyment.

Fear of risks

What's clear across all segments is that there is a palpablefear of the risks of being connected. More than half of respondentswere either "terrified" or "very concerned" about identity theft (65 percent) and cyber-attacks(62 percent) when they heard news stories about hacks and breaches.Nearly half (46 percent) went so far as to indicate that they wouldbe less likely to purchase connected products and devices.

Related: Cyber (in)security: Can insurance solutions keeppace with threats?

The good news for insurers is that value-added services can helpovercome this reticence. Rather than abandon their devices, nearlyeight out of 10 respondents said that they would simply buyadditional products that increase protection against suchrisks.

Across a broad range of 26 internet-connected products,approximately 45 percent of respondents are more likely to buythose that offer a two-year extended warranty or an insurancepolicy covering theft, loss or damage. "Technophiles" in particularare much more likely to protect themselves and their purchases withadditional coverage. In turn, they experience half the level offear and frustration associated with a connected lifestyle.

This is evidence that, despite fears or concerns, consumers wantto remain connected. As insurers, it's our job to help them stayprotected.   

Keith Demmings is president ofglobal lifestyle for Assurant, and a member of the company'smanagement committee. He is responsible for setting strategy,driving financial performance and leading Assurant's connectedliving lines of business, including its mobile phone and extendedprotection plan products and related services, as well as vehicleprotection, credit protection and assistance services. Demmings canbe reached via Andy Mus at [email protected].