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Zurich backs smart technology in UK homes

Zurich is among the first providers to pin its hopes on the anticipated growth of smart technology in UK homes, and more insurers should follow suit.

From setting the heating temperature remotely to boiling the kettle from another room in the house, the internet is gradually making its way into most everyday products and appliances, all of which may soon be controllable from a mobile device.  Smart tech in the home is poised to take off as consumers look to add to the list of things they can operate with efficiency online.

Some of the smart home gadgets on the market may appear complex, but several can quite easily blend into normal life — making things easier and smarter, rather than being a nuisance or a burden. However, allowing appliances to be controlled by Wi-Fi is a big step, especially if the purpose of the device is to monitor occurrences in the home. This means the customer is forfeiting a certain degree of privacy in exchange for increased safety or reduced risk, and many household insurers are beginning to reward those taking the steps to further secure their homes.

Aviva announced in December 2015 the launch of an initiative to fund and invest in new digital technologies which encompass the “internet of things,” and following in a similar fashion is Zurich. The insurer has teamed up with smart tech company Cocoon to offer cheaper home insurance policies for customers who install the tech firm’s all-in-one home security device. UK customers can purchase the device at a discounted rate and receive a 10% reduction on a Zurich home insurance premium, according to Insurance Times.

Cocoon’s device works by monitoring all activity in the home using infrasound (below the range of regular human hearing) to detect intruders. The customer is notified via a video message sent automatically from the device to the user’s phone if it senses anything unusual, after which they can choose how to respond.

Ultimately, such devices provide customers with the ability to better understand and manage the risks to their homes. Like telematics in the private motor insurance industry, the prospect is exciting, with customers given the opportunity to take a smarter approach to mitigating risk. It could also pay off financially for both customers and insurers in the form of reduced premiums and a fall in claims numbers.

Also similarly to telematics, smart home tech is quickly becoming an attractive feature for customers. There is an expectation that the number of smart devices in the home will increase over the coming years, and will eventually become compulsory. The focus of these devices is likely to shift from helping customers save on their premiums to providing added-value services such as diagnostics, as a result of the data collected from the connected appliances.

By Thomas McCourtie, General Insurance Analyst

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