Swinton's Scott Kennedy on the rise of the connected home


Smart technologies are increasingly part of our daily lives, argues Scott Kennedy, managing director of Swinton, as EY’s latest digital home report reveals almost a quarter of UK households now own a voice-controlled device, while 9% have smart security appliances.

Tech-savvy consumers, who have grown up with the internet and are used to always being connected, can now control their homes from their phones while at work or on holiday. 

From an insurance perspective, one of the most important innovations is smart home security. There are smart doorbells with cameras, security cameras with night vision, light systems that can be operated remotely, and door locks that allow you to secure your home without the need for keys.

We should also expect to see further innovations that will help to alert home owners to fire, water damage or even risk of flooding.

We’ve already seen the impact smart technology has had on the car insurance industry in telematics, using data to allow safer drivers to reduce premiums.

This innovation has developed significantly over the last nine years and has become ever more popular with drivers – initially there were 50,000 customers with telematics cover and now it is well over a million. 

Home insurers need to draw on this experience.

The security element of some of the smart home technologies enable homes to be more protected than ever, mitigating the risk of claims and, as a result, potentially bringing down the cost of premiums.

As the cost of these systems continues to decline and they become more widely adopted, it will drive increased data and claims history.

The question is how insurers can play a meaningful role in encouraging the adoption of this smart technology.

In a market that is becoming ever more competitive, product differentiation is critical to drive growth. 

Some home insurers will want months or even years of claims history to see how these innovations are driving down claims before they make a move.

However, it will be those businesses that seize the opportunity sooner rather than later that are likely to reap the best rewards in the form of reduced claims and customer satisfaction over time.

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