Americans want smart home devices for safety, security and cost
savings; but their willingness to share data with insurers is
complicated by privacy and security concerns
PLANO, Texas–(BUSINESS WIRE)–According to research findings released today by NTT
DATA, a top 10 global business and IT services provider, 2 out of 3
U.S. homeowners insurance customers would be willing to change insurance
companies to get policy discounts for using smart home devices,
including smart thermostats, smoke/carbon monoxide detectors and garage
“Our study found that there is a large distinct group of homeowners
insurance customers – 64% of survey respondents – who are willing to
invest in smart home technology. However, these ‘Seekers’ are less loyal
to their current carrier,” said Normand Lepine, Senior Practice Lead,
Insurance Data and Analytics for NTT DATA. “Seekers are the most
important customer segment for insurers to pay attention to as they pose
both a sizable opportunity for growth and a potential risk for
In October 2016, NTT DATA surveyed more than 1,000 U.S. consumers and
over 100 U.S. insurers online to answer four key questions:
- Are consumers ready for smart home technology?
- Will consumers share data to reduce risk and save money?
Are insurance carriers ready for the Internet of Things?
What are the barriers, threats, and opportunities for the insurance
Key Study Findings
Non-traditional players pose a threat to traditional insurance
carriers – 53% of Seekers would trust a non-traditional provider
such as Google or Apple for insurance coverage.
Top three reasons why U.S. consumers buy smart home devices are the
same reasons they buy homeowners insurance – safety, security and
cost savings. However, 80% of U.S. consumers are concerned about
information security and 73% are concerned about privacy when it comes
to sharing data from these devices.
Discounted pricing alleviates consumers’ privacy and security
concerns. Customers are comfortable sharing data from their smart
home devices when insurance companies agree to reduce their policy
premiums. Seekers are more willing to share data, but their comfort
level depends on how personal the data is and from which device:
- 47% of Seekers will share data from thermostats
- 41% from security systems
59% from CO detectors
- Only 24% will share data from cameras
Insurance carriers have made strong progress leveraging smart home
technology to improve products. Carriers realize that the Internet
of Things (IoT) creates opportunities to extend services and value
propositions to customers and change the way insurance is delivered.
The study found 77% of carriers are ramping up IoT initiatives and 59%
say they have made strong progress leveraging smart home technology to
Uncertainty creates an opportunity for disruption. The role
insurers will play in the IoT ecosystem and how they will gain access
to the data from customers’ smart home devices is yet to be
determined. Competitor segments that insurers believe are best
positioned to be major players in the evolving smart home ecosystem
- 72% – Major technology firms (i.e. Google, Apple and Samsung)
- 50% – Home appliance manufacturers
- 36% – Telecommunication firms
- 37% – InsurTech companies
- 25% – Insurers
- 19% – Utilities/cable
“The IoT ecosystem is disrupting the insurance industry, inviting new
competitors, potential partners and changing how products and services
can be delivered,” said Lepine. “Accessing the data that comes from
smart home devices and being ready to leverage it will be key to carrier
success. NTT DATA recommends insurance companies prioritize the
development of partnerships with the smart home gateway firms who will
control the flow of this data. Don’t get shut out.”
View NTT DATA’s research on SlideShare: http://www.slideshare.net/NTTDConsulting/iot-disruption-and-opportunity-in-the-insurance-industry-71069160.
To request a copy of NTT DATA’s research report available in March 2017, http://americas.nttdata.com/Industries/Industries/Insurance/Insurance/smart-home-tech.aspx.
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About NTT DATA
NTT DATA partners with clients to navigate and simplify the modern
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solutions and outcomes that matter most. We deliver tangible business
results by combining deep industry expertise with applied innovations in
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NTT DATA is a top 10 global business and IT services provider with
100,000+ professionals in more than 50 countries, and is part of NTT
Group, a partner to 85 percent of the Fortune 100. Visit nttdata.com/americas
to learn more.
Melody Callaway, +1-704-247-3640