According to research findings released today by NTT DATA, a top 10 global business and IT services provider, 83 percent of U.S. homeowners insurance carriers believe Smart Home and Internet of Things (IoT) technology will attract new property and casualty customers. However, the complete report, “IoT Disruption and Opportunity in the U.S. Insurance Industry,” found that more than two-thirds (68 percent) believe that the inability to gain access to data from Smart Home devices will remain a major hurdle to finalizing carrier programs nationwide.
“While enthusiasm for and investment in the Smart Home ecosystem is high among carriers, major challenges still exist in its evolution,” said Normand Lepine, Senior Practice Lead, Insurance Data and Analytics for NTT DATA. “If carriers are to realize the anticipated benefits of Smart Home technology, they must first lock down the necessary business capabilities for adoption including data analytics and data security, and find partners with proven IoT capabilities to help them prepare to deliver innovative services and products to their homeowner policy holders.”
Key Study Findings
- Carriers must confront the perception gap that exists between themselves and consumers when it comes to policy protection, security, price and IoT. Carriers tend to have a Field of Dreams “if we build it they will come” attitude about Smart Home programs.
- More than triple the percentage of carriers, 55%, versus customers, 16%, say “It sounds great — sign me up!” when it comes to Smart Home programs and policies
- Almost double the percentage of carriers, 72%, than customers, 37%, believe that customers feel protected by their homeowners policies
- 77 percent of insurance carriers compared with 31% of customers think insurance companies really care about improving customers’ safety and security.
- Major challenges exist for insurance carriers. The unknowns that make it difficult for carriers to finalize Smart Home programs include:
- Inability to gain access to data from Smart Homes – 68 percent
- Building analytics into the carrier underwriting process – 62 percent
- Expense required to purchase and install devices – 55 percent
- Carriers see benefits to investing in IoT.
- 87 percent believe IoT will improve customer relationships
- 83 percent see IoT as an opportunity to attract new customers
- 74 percent believe IoT will have an important influence on future products and services
In October 2016, NTT DATA surveyed over 1,000 U.S. homeowners online and more than 100 insurance carrier executives involved in decision-making, budgeting, strategy and execution.