NTT DATA Study Finds 2 out of 3 Consumers Would Switch Insurers to Get Discounts for Using Smart Home Devices

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
, 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
door openers.

“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:

  1. Are consumers ready for smart home technology?
  2. Will consumers share data to reduce risk and save money?
  3. Are insurance carriers ready for the Internet of Things?
  4. What are the barriers, threats, and opportunities for the insurance

Key Study Findings

  • Non-traditional players pose a threat to traditional insurance
    – 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
    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
    improve products.
  • 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:

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Melody Callaway, +1-704-247-3640