Carrier approaches to home telematics are limited, and lack many of the value-added services present in health insurance with wearables or usage-based insurance in auto, according to Sasha Sanyal, insurance business leader for professional services firm Genpact.

Insurers must go beyond offering premium discounts as an incentive to sharing personal data, and inform policyholders about how they plan to prevent claims altogether. Being transparent about ways household data will be leveraged also helps calm policyholder privacy concerns, she says.

Sasha Sanyal, Genpact
Sasha Sanyal, Genpact Genpact

“What value will it add to my life to proactively allow you to collect data?” said Sanyal. “Tell me ‘I will manage these four things for you’ and make my life easier. The more insurers do that, the more telematics [devices] will be adopted in the home.”

Gathered intelligence from smart water heaters, refrigerators and smoke detectors, among other connected-home devices, can help carriers prevent home emergencies, leading to users becoming more comfortable sharing sensor data, Sanyal adds.

Yet, not enough carriers think about how to properly manage customer data once they retrieve it, she says. Most are in the data aggregation phase when it comes to home telematics. A few more progressive companies are just starting to pair data sources together to gain actionable insights. These efforts are usually lead by newly-appointed chief data officers.

“All of a sudden, you have new data for 100,000 users and it brings about a different set of data security issues, said Sanyal. “The information is different than anonymized underwriting data.”

Sanyal predicts the home telematics market will grow faster than current industry forecasts. The sector may even surpass auto telematics, due to the variety of sensors and information available to insurers. But it’s up to incumbents to get more involved in the space, as they hold one key advantage: access to historical data. When paired with new customer insights, better risk profiles can be developed.

“In this day in age, whoever owns data is king,” Sanyal concluded. “If carriers don’t work with sensor companies, they will be left behind. Disruptors [insurtechs] will get behind them and build simpler models.”

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