The future of Connected Home Insurance

Edward Dutton

By Edward Dutton
CEO of British Gas Insurance

The use of smart home technology continues to grow around the world. Typically, the most commonly owned smart home items are smart thermostats, lighting and speakers with virtual assistants like Amazon Alexa and Google Home. EY suggests that 26% of UK Homes own a smart home product, and a recent GfK survey announced that 49% of US homes now owned at least one.

The same research by Berg Insight reveals that the number of households in Europe using smart technology is expected to grow by 54% between now and 2020. In North America, with that higher percentage of households which already have smart home technology, the growth in adoption is expected to rise by 31% over the same period.   

Today’s adopters are finding reassurance from smart home tech, knowing children have arrived home from school, or are making sure their pets are okay at home on their own. Listening devices, such as the Hive Hub 360 , can also recognise dogs barking, glass breaking or even traditional smoke alarms being activated.

The insurance industry continues to try and utilise the connected home within a property insurance space, to identify problems early (such as water leaks, recognise theft risk from doors and windows) with insurers assessing better, or leading to more accurate policy pricing.  Research shows that consumers would be encouraged to adopt connected devices if it lead to cheaper home insurance.

However, it’s not straight forward for Insurers. The connected home is developing as an ecosystem in the home, and not with Insurance at the forefront. The cost of devices means they are unlikely to be installed purely for home insurance benefits.

There’s also the matter of how to integrate with such a variety of connected devices from multiple providers – a Nest Smoke alarm and Camera, a Honeywell thermostat, a Yale smart lock and so on.  Whilst much of the software to utilise and control these devices is open source, and compatibility with the large Home Control Apps is increasing, there are still issues connecting with some provider technologies.  Whilst the customer will be able to create a single interface for multiple device providers, using those propositions for the benefit of insurance remains a distinct challenge.

The future Connected Home Insurance proposition remains, we believe, the integration of connected devices and related services into a single protection product. Smart sensors monitor the home, helping to detect problems and protect the home. Devices are controlled from an App.  If needed, repair and maintenance services are included to solve problems and keep the home running smoothly.  And finally, a comprehensive buildings and contents insurance safety net is in place should the worst happen.

Centrica is already on this journey with Boiler IQ from British Gas , giving total peace of mind. A device constantly monitors the boilers performance and when it stops generating heating or hot water.  British Gas will automatically contact a customer in the event of failure to arrange an engineer to fix it. And to the benefit of both the customer and company, the information received can ensure that the engineer will arrive with the correct parts to ensure the repair is completed.

We want to make people’s lives easier, by providing seamless, time-saving services that are easy to use and help save them money. Understanding and satisfying consumer needs is critical to our success.