The Untapped IoT Potential In The European Commercial Insurance Industry

The global IoT door is open - The decision is when and how providers choose step through it

Smart Home Leadership

6/05/24

From grilling and boating to camping and bonfires, our favorite summer activities require the right supplies to help stay safe. Just like sunscreen and insect repellent, the First Alert EZ Fire Spray is an accessory to have on hand during the summer. Offering an easy-to-use solution in the event a small fire breaks out, the First Alert EZ Fire Spray features a lightweight spray-can design that has no pins or levers – just point and spray. Its small size makes it ideal for storage and travel, and easier to use than a traditional fire extinguisher.

To help stay safe this summer, consider keeping EZ Fire Spray at the following locations:

By the grill. Grilling is a favorite activity for many people, but it’s important to keep safety top of mind, especially when your backyard may be buzzing with guests and summer festivities. Remember to keep your grill in a safe location, away from railings, siding and other flammable materials. Be sure your grill is clean of any leftover food debris or grease before you begin cooking.

At the bonfire. Keep fire pits at least 10 feet away from the house and any other flammable hazards. Keep a close eye on children and pets when you are using the fire pit and ensure that the fire is put out before leaving the backyard.

Near the fireworks. According to the National Fire Prevention Association, more than 19,500 reported fires are started by fireworks annually. If you’re lighting fireworks, make sure they are legal in your area before buying them. Never try to re-light or pick up fireworks that have not ignited fully, and never use fireworks while impaired by alcohol or drugs.

With the camping gear. Check the weather forecast before your trip, as severe wind and inclement weather can cause problems around the campfire. Some locations will even have a ban on fires if the area is particularly dry, so check the daily regulations of your campground. If you choose to light a campfire, keep it away from overhanging trees, RVs and other structures. When you’re ready to put the fire out, douse it completely in water until no fire or glowing embers remain.

And some activities require specialized gear. If you’re headed out on the boat this summer, make sure that you have a fire extinguisher on board, like this marine fire extinguisher, which fights flammable liquid and electrical fires and is ideal for use on all types of boats. And inspect your watercraft every time you take it out by checking cooling and exhaust systems, electrical wiring, cords and battery-charging equipment; these all could contribute to boat fires.

For more helpful tips on how to help keep your home and family protected, visit firstalert.com.

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Changing the commercial insurance game for multifamily properties

Cutting insurance and maintenance costs for property managers and connecting a block of flats to create a smart/connected community, could lead to better property value as, with the right actions taken, the risk of mold and moisture damage is reduced. As an example, our sfty by Resideo team offers a system-based approach to protecting whole-building community safety and assets in apartment blocks. This gives building managers and owners smarter ways to control and monitor connected water leak sensors for several apartments,and supports effective building evacuation strategies through early smoke and fire detection. This is game changing for all concerned:

The families who live in the apartment blocks and want to feel safe – and that's a lot of people across Europe! Eurostat – the statistical office of the European Union – outlined that in 2022 nearly half of the EU population (47.5%) lived in a flat, while in cities it rose to nearly three out of four people (72%).
The property managers who don't want to rely on outdated manual processes for the health and safety of their buildings and residents who need real-time systems and data to connect communities and protect assets.
The Insurers who want to prevent costly claims from arising rather than paying out after the event. For example, according to the UK's Association of British Insurers (ABI), the escape of water damage is one of the most common types of domestic property damage claims, with UK insurers paying out £1.8 million for it every day. And in 2022 Norwegian insurance companies paid NOK 5.6 billion in damages in this category.

Entering New Residential IoT Phase

But just how attractive are IoT devices to insurers and home users? Recent US research shows that smart home devices can lure customers away from their current insurance providers.

Current residential IoT device adoption is crossing the bridge from 'early adoption' into 'mass market' adoption. According to Parks Associates, we’re in the Early Majority stage: consumers can relate to the new technology, yet they still need proof of value. While we've reached a critical mass for deployed sensors and devices that can better mitigate risk in homes, at this stage consumers' motivation to purchase is based on practicality.

This is underlined by the recent Insurance Opportunities in the Smart Home research, also from Parks Associates, that found that one-third of U.S. internet households with homeowner’s/renter’s insurance would switch providers to acquire smart home devices. With insurance costs rising, homeowners and insurers are both looking for practical solutions to reduce premiums, claims, and payouts.

This adoption trend should correlate to commercial markets as well, because having smart home features in the multi-family sector could have a direct correlation to increasing net operating income, and therefore property value for residences under management.

Moving from detection to actuation can lead to better business outcomes

I think we all know prevention is better than "the cure." Moving from detection to actuation is something that should already be prevalent for commercial properties today.

Water leak detection is a commonly deployed use case because it is powerful: Resideo's water leak detectors have already helped consumers save millions of gallons of water and avoid millions of dollars paid out in insurance claims.

However, beyond water use cases, there is so much more untapped potential in the commercial sector including equipment uptime and repair, to AI-powered video-enabled security, and energy efficiency use cases. Resideo offers solutions that help predict HVAC system failures and even provide specificity on the types of parts needed for service when maintenance is deployed. The technologies already exist to solve those problems today, but they are not deployed at critical mass levels across the landscape of IoT and insurance yet.

Beyond prevention, the untapped potential lies in the business outcome of lower operating expenses, better utilization of assets, and increased profitability commercial insurance companies can deliver to their policy holders. How do we know that? Because as my fellow panelists and I discussed, the data is there. For example, Resideo has more than 11.6 million connected customers worldwide and we have processed hundreds of billions of data transactions last year on our services for homeowners and providers. If we partner to combine the data in a way that is safe for the policyholder with their consent, we can unlock a wealth of better outcomes that transcend just protection of assets and crosses over into enabling business success for multifamily properties, together with the most innovative insurance partners.

It's really three steps: detection, prevention, and proactive business outcome improvements.

Commercial insurance offerings haven't reached their potential in the 'outcome improvement' stage – but it can be done! It's the secret sauce for insurance value creation that seems to have been used primarily internally, but it can unlock great value used externally for policyholders.

I continue to be impatient for the future… but honored to work with partners in this sector, including the most innovative insurance companies, insurtech partners, IoT manufacturers, PropTech providers, professional property managers, real estate owners and consumers. Together, we can walk through the open door of progress, and harness the proven potential of prevention enabled by IoT.

Wouldn't Ben Franklin be proud?

Linsey Miller*

Linsey Miller is the Senior Vice President of Business Development and Strategic Marketing at Resideo and Board Director at Home Connectivity Alliance. Linsey has a proven track record of leading growth for large technology companies, experience starting up new business, managing P&L, leading strategic growth and turnaround teams for private equity-owned and publicly-traded companies. Linsey's specialisms include: consumer electronics, energy efficient power infrastructure, data centers, enterprise and telecom computing.

Before Resideo, she worked as Vice President, Data Center Computing and Telecom & Networking Global Sales at Advanced Energy, Vice President of Product Management and Marketing, Embedded Computing at Artesyn Embedded Technologies, Director Business Development at Emerson Network Power.

Linsey completed an advanced management program at Harvard Business School, and earned an undergraduate degree from The University of Texas at Austin.