Following the news that Sky has launched a home insurance product that uses smart home devices into the UK market;

Benjamin Hatton, Insurance Analyst at GlobalData, a leading data and analytics company, offers his view:

“Sky’s smart home insurance policy could change the UK home insurance market with its high level of smart technology integration. GlobalData’s 2022 UK Insurance Consumer Survey* suggests that almost two-thirds of consumers would be interested in sharing data from a smart device with their home insurer in return for financial savings. Furthermore, 12.2% of UK home insurance customers stated they would be open to purchasing home insurance from Sky, showing the large pool of potential customers it has.

“Sky’s new insurance product is ideal for the demands of more modern and technologically sophisticated consumers. Using smart tech to entice in new customers but then utilizing it to manage and mitigate claims more effectively (when home insurance claims are in danger of spiraling) could prove to be the model for other home insurers to follow. Sky’s advantage is that it can afford to distribute so much expensive technology, as it is not hamstrung by having most of its insurance customers on regular policies. This means that its customer base will have smaller risk profiles (as the tech mitigates some claims), impacting claims more immediately than legacy insurers who are gradually looking to integrate smart home products into their offerings.

“Sky offers a double incentive to customers looking to switch to its new smart home insurance product. Firstly, the consumer gets £250 worth of smart tech, including a video doorbell, an indoor camera, and various sensors (including a leak detector). According to GlobalData’s survey, 31.2% of consumers indicated that this is a sufficient incentive for them to share data with their home insurer, suggesting that such a tech package could generate early interest.

“Secondly, Sky says that existing customers (of which it has many due to its range of TV and broadband packages) who purchase the smart home policy will save £5 per month over the two-year insurance contract, resulting in £120 worth of savings. When considering the ongoing cost-of-living crisis in the UK, this will also encourage a large cohort to consider switching.”

*GlobalData’s 2022 UK Insurance Consumer Survey consisted of 4,017 respondents