Smart products are becoming increasingly fashionable, with German insurers as well. For instance, household insurance can be conveniently combined with smart home fire and burglary technology to provide “smart insurance” protection.
Smoke detectors can save lives in the event of a fire. But what happens if nobody’s home to hear the analog alarm? This is where the networked home can provide valuable services: Smart fire protection can automatically send a message to the owner or renter’s smartphone. This way, the fire department can be notified without delay, even from the gym or while on vacation.
Cooperation with Google subsidiary
A law on the installation of smoke detectors has been in effect throughout Germany since January 2017. According to the forsa Institute for Social Research and Statistical Analysis, 49 percent of all Germans would like to use a smart smoke detector, but only three percent currently do so. Insurer CosmosDirekt, a subsidiary of the Generali Group, now wants to encourage its customers to make use of this smart home feature with a special package offer. Those who sign up for household insurance will get the smoke and carbon monoxide detector from the Google subsidiary Nest at an affordable extra charge. “The new offer is another step in Generali’s smart insurance offensive in Germany,” explains Dr. David Stachon, chairman of CosmosDirekt. “By cooperating with Nest Labs, we’re helping our customers protect their homes through innovative technical solutions – before damage occurs.”
Warning of cyber crime
For insurance providers, the smart home means accessing a new business field. According to market researchers GfK, only seven percent of the population in this part of the world uses smart home technology, but it is conceivable that digital features will become more widespread in households – especially since 69 percent of Germans are at least familiar with the term “smart home”. However, the German Insurance Association (Gesamtverband der Deutschen Versicherungswirtschaft, GDV) warns about the risks that come along with this, as more networking can provide a gateway for cyber criminals: “Consumers need to clearly recognize what they’re purchasing with the ‘smart home’ label,” emphasizes GDV’s Bernhard Gause. “There need to be clear rules that apply to all suppliers in order to minimize the cyber risks for users.”
New partnerships for digital insurance services
Precisely here is where the ERGO Group, which has also discovered the smart home as an expansion to its core business, is stepping in. “Our customers are already making intensive use of networked products. Digitization makes it possible for us to develop innovative insurance solutions for these products,” says Mark Klein, the ERGO Group’s chief digital officer. “The goal is to make life easier for our customers and limit damage with digital support.” Together with Telekom, ERGO aims to seamlessly combine consultation, insurance protection, and damage repair. For the magenta corporation, cooperation with an insurance provider also means an upgrade of its smart home offer. Fact is, Telekom sees a sensible symbiosis here: “In future, we want to offer our customers not just exciting technology, but also protection for networked living and working. This is why ERGO and Deutsche Telekom are bundling their competencies,” explains Telekom Chairman and T-Systems CEO Reinhard Clemens. “The opportunities in this future field of digital insurance services can only be tapped together. No partner could implement all of this alone.”
Smart insurance provider emergency service
ERGO is also focusing on intelligent fire protection and, in doing so, is providing a further service. If customers can’t respond to the fire alarm sent by their smart smoke detector, notification will automatically be forwarded to the ERGO emergency service. The insurance provider will then take care of all further measures. The same applies to water damage and domestic burglaries. In this case, ERGO would notify a plumber or even the police.
Protection for your networked life
ERGO and Telekom are also addressing the topic of cyber security, which isn’t just limited to the smart home but also concerns anyone using the internet. In early 2018, “cyber protection coverage” is expected to include reputation protection, home network security, and data security. The combination of security solution and insurance is intended to cover the financial losses due to misuse of customer and account data – even in the event of attacks on the networked home.
Insurance model of the future
Digitization seems to have arrived with insurance providers, but it’s the smart insurance services in particular that are changing their roles and making themselves more attractive to consumers: “Our smart home offer once again shows what opportunities digitization has to offer,” says Mark Klein of ERGO. “It’s helping us insurance providers go from risk takers to risk managers. We take comprehensive care of our customers by joining them in avoiding or limiting damage, and to this end we make use of strong partners and the latest technology. I’m convinced: This is the insurance model of the future.”
With this business model, insurance providers can make the leap from the classic push product to the pull product, and thus significantly increase active customer demand.
Author: Editorial team Future. Customer. Image: Stanisic Vladimir AdobeStock