33% of Households with Insurance Would Switch Providers to Acquire Smart Home Devices — Parks Associates Reports
A recent Parks Associates research study finds that one-third of US internet households with homeowner’s or renter’s insurance would switch providers to acquire smart home devices.
The study investigates consumer preferences for IoT devices that can impact insurance premiums or claims and evaluates the opportunity for IoT growth through the insurance channel.
With insurance costs rising nationwide, homeowners and insurers are both looking for solutions to reduce premiums, claims, and payouts.
Jennifer Kent, VP, Research, Parks Associates
Parks Associates’ research study, Insurance Opportunities in the Smart Home, finds that one-third of US internet households with homeowner’s/renter’s insurance would switch providers to acquire smart home devices. The study of 8,000 US internet households investigates consumer preferences for IoT devices that can impact insurance premiums or claims and evaluates the opportunity for IoT growth through the insurance channel.
With insurance costs rising nationwide, homeowners and insurers are both looking for solutions to reduce premiums, claims, and payouts. Smart home devices can detect and prevent costly damages, particularly related to water and faulty wiring. Water-related damage is by far the most common home damage, with 26% of US households reporting this kind of damage. According to the Insurance Information Institute, the average cost of water damage/leaks is $9,633, while the average for flood/weather-related damage is $8,625.
“Insurance is a highly competitive industry, with numerous companies offering similar products,” said Jennifer Kent, VP, Research, Parks Associates. “Customers often have multiple options to choose from, making it easier for them to switch to a different insurer. Smart home devices can lure customers from their existing insurance providers and attract customers who are new to the home insurance category.”
Partnerships between insurance and smart home companies highlight the alignment of both industries' goals and business strategies. For example, a recent collaboration between Nationwide and Resideo will allow homeowners to get insurance discounts when they acquire specific device packages, to be announced in early 2024. This partnership extends the smart home to more proactive use cases, where the products sense and report potential risks before they create costly damages.
“These collaborations enable insurers to reduce risks, enhance customer engagement, differentiate themselves in the market, and tap into the growing smart home technology sector,” Kent said. “It's a win-win strategy that benefits the insurance industry and homeowners seeking enhanced protection and peace of mind.”
For more information or to read the full report, please visit www.parksassociates.com.