Embed Size (px)
Citation preview
Internet of Insurance, NYC, Sept 27-28, 2016
Smart Home and Insurance: A perfect match
Bent Sorensen, Business Development Director Americas
Sigma at a Glance
• Corporate Profile
• Founded in 1982
• HQ in Fremont, CA
• 700+ Employees
• 9 Sales and R&D Offices
• $250M Run Rate
• NASDAQ: SIGM
Z-Wave at the Center of IoT
How Big is the Smart Home Market?
4
$135m today; $2.5b in 5 yrs.(Frost & Sullivan)
$2.2b today; $4.8b 2024(Navigent Research)
Lighting Controls
Climate Controls
$5.8b by 2020; 23% CAGR(Research & Markets)
Camera Monitoring
Access Controls
Global Market = USD $15.6b in 2016; $47b by 2020 ► 28% CAGR through 2020 worldwide
► Now moving from early adopters into mainstream use
► Europe = $15.28 Billion by 2020; 16% CAGR from 2015 to 2020
$261m today; $3.6b 2019(Next Market Insights)
(Statistica, Grand View Research, Markets & Markets)
What Does a Smart Home Do?
5
Fends Off Disasters, Mitigates Damage
► Example 1: Flooding is #1 insurance claim in US► Inexpensive flood sensors monitor/alert risk conditions
► Smart valves turn off water supply, minimize flood damage
► Pre-empts preventable damage, minimizes unavoidable damage
► Reduces quantity and size of claims
► Example 2: Smart smoke alarms save homes & lives► Allows an empty house to call for help
► Lets 3rd parties be certain that detectors are working
► Lights the way for safe evacuation by woken residents
► Reduces quantity and size of claims
What Does a Smart Home Do?
6
Pre-empts Incidents, Reduces Claims
► Example 3: 74% of burglaries prevented by alarm in place ► Most break-ins during the day, through front door or garage
► Smart door locks and garage controls remedy common oversights
► Inexpensive cameras and sensors alert undesirable activity
► Fewer intrusions successful – fewer claims
► Example 4: Homes that seem occupied stay safer ► Automated/randomized lighting: "someone" is always home
► Smart doorbells can be watched remotely via smartphone
► Inexpensive interior cameras popular in MDU buildings
► Fewer intrusions attempted – fewer claims
Alarm Industry Research & Educational Foundation, Better Business Bureau
Smart Homes Empower Smart Insurance
A Smart Home or Business Reduces P&C Claims and Improves Underwriting
7
Customers are Clamoring for 'Smart'
Q3, 2015:
► 21% of all ADT customers have now joined or upgraded to Pulse – 1.4 million clients
► Residential: 50.6% of new and existing clients
► >6% increase in recurring revenues
► 40% lower attrition rate over 3 years
Source: CE Pro8
Case Study: Pulse Smart Home Transformed ADT's Security Business
US Security leaderFounded 1874
7 million customers35 countries
“We expect our addressable market for residential, business and health to nearly triple over the next five years.”
Naren K. Gursahaney, ADT president, CEO and director
Green Fields for the Insurance Industry
9
Insurance companies are the most logical smart home providers
► 45% of all insurers feel connected devices will be a driver of revenue
growth in the next three years.....Fortune Magazine
► 35% of consumers ready to shop for smart home products and
services will consider home insurance companies.....Strategy Analytics
► 60% of European top insurers have connected car solutions but
almost none has entered smart home/health.....Roland Berger Strategy
Win Today's New Younger Customers
10
Millennials (Generation Y) Love DIY Security, Powered by Z-Wave
“Today’s smart home products no longer require professional
installation and ongoing subscriptions, many are now plug-and-play
options. The product mix such as smart cameras, lights and plugs fits
the lifestyle of both home owners and renters, which opens up a larger,
younger and more tech-savvy consumer market."
John Buffone, Executive Director, Industry Analyst, Connected Intelligence, NPD
Win Today's New Younger Customers
11
Millenials are demanding smart insurance and willing to share data
► Nearly 90 percent of Millennials said they were open to signing
up for a "usage-based insurance" policy in exchange for discounts,
compared with 74 percent for other age groups......Towers Watson
► Millennials are twice as likely as the total population to have a
smart home product installed in their residence.....NPD
► Renters are as likely as home owners to have smart home
products installed, and are three times more likely to be part of
the millennial age group. More than a third of renters are
between the ages of 18-34......NPD
New Opportunities For Insurance
► Exciting new value-added products & services
► Personalized policies with dynamic pricing
► Closer, improved customer relationships
► Valuable data for telemetry-based underwriting
► How secure is the home or building?
► How safe is the neighborhood trending?
► How risky are individual systems (water, wiring, etc.)?
► How well is the property being maintained?
► How often is there activity that amplifies risk?
12
Smart Homes + Insurance Providers = A Perfect Match
How Can Insurers Take Advantage?
13
Three Flexible Business Models To Choose From:
► Discounts: Price incentives for customers that
install smart products and services in their home
► Partnerships: Collaboration with established
security and integrated technology vendors
► Own Platform/Brand: Build and offer
company's own smart home hardware devices and
software services – the gold standard
Business Model A: Customer Discounts
14
Reward Diligent Customers and Entice New Ones
Discounts motivate current customers to help protect
themselves, and attract new customers that will do the same.
► American Family Insurance offers a 5% discount for homes
with smart home products that can alert fire risk, theft risk or
water leaks. The company is also subsidizing self-install smart
smoke/C02 detectors in test markets.
► Travelers offers homeowners a variety of "protective device"
discounts, and will discount an additional 5% for energy-
efficient homes that are certified "green" by LEED standards.
Business Model A: Customer Discounts
15
Z-Wave Has Created a Vibrant, Popular DIY Smart Home Market
► Broad Availability: Over 1500 products from 200+ brands,
available at retail or through professional home service providers
► Interoperable Products: All Z-Wave products work together,
regardless of brand or version; backwards compatible
►Affordability: Devices and kits often pay for themselves even
before insurance discounts
Business Model B: Vendor Partnerships
16
Organic Connection To Thousands of New Customers
Open new opportunities through collaborations with
security vendors and their rich activity data.
► Liberty Mutual has partnered with Vivint: discounts initial
activation, offers up to $1300 in product rebates with free
installation and free smoke detector. A five-year contract
ensures ROI and long-term customer relationship.
► State Farm has partnered with ADT for professionally
monitored security, Canary for self-monitored security, and
Iris by Lowes, which offers consumers a choice of self- or
professional monitoring.
Business Model B: Vendor Partnerships
17
90% of professionally installed smart security is Powered by Z-Wave
► Via Traditional Security Vendors: "Alarm companies" that have
evolved into smart security systems and home monitoring
► Via Telcos and MSOs: Security and smart home now offered as
the "4th Play" in conventional triple-play broadband home services
► Most Requested Smart Home Service: In every consumer survey,
security is cited as #1 reason for smart home purchases
► An International Standard: The Z-Wave protocol is approved for
use throughout global markets on five continents
Model C: Own Smart Home Service
18
An Unprecedented Opportunity to Expand Your Businesses Quickly and easily create your own products and services.
Own the customer and invaluable customer data. Provide the ultimate in protective products and services.
Z-Wave makes it easy.
Model C: Your Own Smart Home Service
19
Why Should Insurance Companies Create Smart Home Offerings?
► Increase customer interaction: Own home monitoring portal
ensures more customer contact and interaction.
► Guarantee personalized policies: No intermediaries between home
activity, systems data, and risk assessment.
► Create recurring monthly revenue: Profitable monitoring and alert
services, particularly for home security and senior monitoring.
► Enhance customer loyalty and retention: Insurers control the
experience, incentivize customers, create long-term relationships.
Critical Success Factors When Rolling out IoTSmartHome
Choose technology with big ecosystem to offer wide array of products from reputable companies/brands. Big ecosystem also enables upselling in next stages (Lego for adults).
Interoperability to ensure products work together no matter the manufacturer/brand.
Require top notch security to give consumers peace of mind and protect against hackers.
Backwards compatibility to ensure present $$ investment and avoid ending end up with different “flavors” of installations which are hard to manage and cause truck rolls.
Full home coverage through strong network without interference issues
Sigma Designs can help insurance companies with introduction to platform providers, OEMs, defining the right bundles based on individual needs, etc.
Recap: Smart Insurance/Smart Home Value Chain
21
► Loss Prevention – Real-time information that pre-empts events and
mitigates losses: freezes, floods, mold, structural vulnerabilities, etc.
► Claims – Automated FNOL for common events; data helps determine
claim causes; improves adjudication; creates a preventative ecosystem.
► Underwriting – Visualization and quantification of physical hazards;
evidence of changes in risk (accommodation sharing, etc.).
► Product Management – Provide customized pricing and services with
3rd parties; policies and discounts based on data and usage.
► Brand enhancement - higher customer satisfaction and loyalty and
less churn
Rapid Deployment With Z-Wave
22
Comprehensive Solutions; Bring Products to Market Quickly
► Products and software that cover every smart home function
► Your choice of turn-key or fully customizable solutions
► Mature, proven device and command classes, easy development
►Industry-best encryption provides hacker-free peace of mind
