Leveraging IoT and Smart Devices over the Life of a Policy
Are your insurance customers changing?
It’s not just because nearly all of America’s 83.1 million millennials are out of college and into the workforce. Even baby boomers are beginning to reflect the same shift in customer expectations and preferences that their children have defined. (And what will generation Z expect as they move into the workforce?)
Twenty-first century consumers make judgements differently than traditional insurance customers, as we’ve remarked before. They care more about the customer experience they receive; they respond enthusiastically to modern, digital marketing practices, and they are more willing to share personal data if it benefits their e-wallet.
Technology has changed as rapidly as consumers, enabling new and more numerous interactions between insurance companies and their customers. Where traditionally, insurers interact with customers only twice—at the purchase of a policy and the settling of a claim—now they interact through social media, mobile apps, telematics, and a myriad of other channels over the entire lifetime of the policy.
With all this disruption, can you imagine what a successful insurance company will look like in ten years? I’ll help you. Let’s look at how one woman’s home insurance provider will leverage smart devices and the internet of things (IoT) over the lifetime of her policy in the near future.
Closing the sale
Already, insurance companies are leveraging IoT for marketing and customer experience applications to bring in more customers, reach new demographics, and sell more policies.
So, by the time Danni Williamson enters the market for a new home in 2030, it’s no wonder a number of insurers have found out. Through predictive data analytics and social media retargeting, Retail Insurance Company serves Danni a customized advertisement inviting her to tour a showcase “smart home” in her area. The ad piques her interest because it addresses her by name and shows up on her favorite social media channel, so she decides to visit the home.
Danni is surprised to discover just how many smart devices monitor the health of the property. As she walks through the home, she uses her smartphone to load an app with an augmented reality-enabled tour guide. As she points her camera at different locations in the house, the guide points out the water sensors that can detect leaking pipes, and how the smoke detectors can work in conjunction with the thermostats to confirm the existence and magnitude of a fire. When she points the camera to the door, she sees a fictional intruder try to break into the home, but the video doorbell senses an unfamiliar visitor, warns the authorities, and records the intruder’s actions.
Danni’s impressed by the IoT enabled home, but thinks it will be expensive. The agent showing the house corrects her—in fact, Retail Insurance Company will offer a discount on her home insurance for installing certain devices and choosing their partner security company to set up her home security system.
When Danni gets home, she receives an email about her recent visit. Retail Insurance Company has created a personalized insurance package based on her location, age, social media behavior, and job. The whole process is so easy and tailored to her needs that Danni decides to make the purchase. She’s even more impressed when she pulls up her customer portal. All of the details of her policy are clearly marked, she can set up automatic payments for her premium, manage all of the smart devices in her home, and quickly get in contact with her agent or support staff through a chat bot or phone line.
Retail Insurance Company’s IoT powered marketing campaign works. Danni has moved into her new smart home, feeling peace of mind that her personalized home insurance will have her covered.
One day, Danni receives a notification from her Retail Insurance Company portal: a sensor indicated that there’s a leaking pipe. Fortunately, she doesn’t have to rush home from her important meeting, because she can turn off the water source from the mobile app, preventing a damaging flood. Her actions in the app also notify her agent who follows up to find out if there was any damage.
Later, as Danni enjoys a well-earned vacation, she receives another notification from her portal. Her video doorbell and security system identified an intruder. Before Danni can take action, she’s assured by a message in the app that the police were already called and found no property damage or suspect. Apparently, her smart lights scared the would-be burglar away.
On her way back from vacation, driving in her new, 3D printed car, Danni’s auto insurance app suggests a different route. A storm is coming in and the road she would normally take is particularly dangerous in the rain. She follows the suggested route and gets home safe and sound.
A year later, Danni accidentally leaves her oven on in her house. The fire alarm quickly notifies emergency services, while the smart thermostat confirms that it’s not a false positive—the temperature in the kitchen has raised significantly. Without Danni having to touch a button, the fire department is contacted and a truck arrives in time to put out the fire. Unfortunately, her kitchen is scorched.
Danni has so much on her mind with the disaster, the last thing she wants to do is file a claim and deal with the bureaucracy of an insurance company. However, her smart devices have already notified her agent about the claim. She receives a warm, genuine email from her agent expressing sympathy for her property loss and suggesting a number of approved vendors to take care of the damage. She’s surprised, but relieved that she doesn’t have to vet contractors herself.
After the contractor completes the kitchen repair, Danni’s smart home confirms that all levels are back to a “normal state”. The video doorbell detects that the crew has departed, and Danni’s agent marks the claim complete.
It’s truly amazing the value insurers can deliver when they leverage smart devices and the Internet of Things. If insurance companies plan for this future now by digitally transforming their organization and forging strong partnerships with smart device providers, they can create a lasting competitive advantage.