risk management are changing. Thanks to advances in technology, the focus today
has shifted more toward preventing losses instead of just paying for them. The
Internet of Things and the power of connected sensors has enabled property
owners to monitor their buildings 24/7 and manage risks in real time.
really driven the demand for smart systems, which exploded in popularity
primarily because of their convenience. “Smart homes” keep homeowners in
control no matter where they are. With a few taps in an app, owners can adjust
their thermostat, turn off the light in the bedroom, turn on some music to keep
the dog entertained, or check to see if they left the garage door open – all
from miles away.
security devices are one of the most common smart home applications. According
to Statista, the number of homes using smart home security devices is expected
to increase 287% from 12.8 million in 2017 to 36.7 million by 2023. In other
words, in the next three years, more than a quarter of US homes will be using
home security devices.
of IoT are not just for homeowners. For owners of small businesses and other
commercial properties, IoT-connected sensors have benefits that extend far
beyond convenience – namely, the ability to spot and mitigate problems before
they turn into insurance claims.
like Notion’s are able to detect water leaks, opening doors and windows,
sounding smoke and carbon monoxide alarms and temperature changes. Small and
easy to install, they can be placed throughout a property.
connect to a property’s Wi-Fi system and can be monitored via the Notion
smartphone app. Users set their own parameters for alerts, which are sent via
push notification. On average, users engage with Notion seven to 10 times per
day. For example, a parent at work might open Notion’s notification at 3:00,
checking to make sure that the front door opened, indicating that their child’s
bus got them home in time.
the option to add-on NotionPRO, a 24/7 professional monitoring service. If a
user doesn’t respond to a triggered alarm, it gets escalated to a certified
dispatcher who follows up and ultimately sends emergency services to check on
the home. This ensures that alarms get addressed without requiring a property
owner to be tied to their app around the clock.
smoke or carbon monoxide alarms or an opened window – which could suggest a
break-in – these notifications are vital. A fire or burglary can’t always be
detected early enough to prevent damages, but a faster response nonetheless
increases the chance that more property can be spared.
to focus on de-risking a property and empowering property owners to protect
their people, spaces, and most valued possessions.
owners tend to be reactive about maintenance, waiting for something to break
before investing to fix it, which ends up being a more costly approach.
Connected technology and constant monitoring transfers some power back into the
hands of the property owner by providing a clearer picture of what’s going on
in the home and allowing them to make more informed decisions. Ultimately, the
goal is to enable more proactive maintenance, the avoidance of big losses, and
extended peace of mind.
Proactively and in Real Time
property losses, incidents like burst pipes, leaks and fire don’t care whether
a structure is residential or commercial. Small business owners face the same
exposures as homeowner and likewise can benefit from a detect-and-prevent
approach that minimizes losses, and the expenses associated with them.
near plumbing in the basement, for example, can alert the owner of a
mom-and-pop retail shop of freezing temperatures, which can help them decrease
the likelihood of a burst pipe. Taking action to warm up that area drastically
reduces the risk of future water damage, the need for plumbing repair, and
possible business interruption.
Insurance Information Institute (III), about 30% of all home insurance losses
in 2016 were due to water damage and freezing. The average water damage claim
costs about $10,000. A connected sensor system designed for small facilities
generally runs no more than $200.
winter right around the corner, the ROI is indisputable.
maintenance and faster response to emergent issues in turn improve an insured’s
risk profile. A history of minimal or no losses always looks good when policy
renewals roll around, and can help small businesses avoid premium increases.
use Notion have had ZERO water damage insurance claims. Notion has helped
reduce property damage insurance claims for insurance carriers by more than $1
million in the last year alone – and that’s just damage caused by water leaks.
these systems are generally low-cost and easy to use. Notion’s starter kits of
three or five sensors, a bridge that links the system to a property’s Wi-Fi,
and a smartphone app runs just $150 to $200. The initial investment is well
worth the avoidance of a loss averaging thousands of dollars.
partnerships with both personal and commercial insurers, Notion is bringing its
multifunctional sensors to small business owners. In most cases, insurers will
subsidize the cost or offer a policy discount for the monitoring system and the
additional NotionPRO professional monitoring service.
collected via the system can provide underwriters a better understanding of an
insured’s exposure and the extent of their risk mitigation efforts. Just like
auto insurers are able to track insureds’ driving behavior and provide
financial incentives for “safe drivers,” property insurers will be better able
to differentiate levels of risk based on the feedback provided by sensor
technology. To start, it could be as simple as identifying if a system is “on”
or “off”, validating a “smart home” discount.
interested in avoiding losses, insurers are increasingly the conduit between
consumers and the latest technology. XL Innovate’s investments in and
partnerships with insurtech companies like Notion have helped AXA XL not only
stay up-to-date on new solutions, but also to connect clients to applicable and
providers today, having an IoT strategy is not just nice to have – it’s an
absolute necessity. The benefits of this technology are clear, and the demand
from commercial entities will only increase. Carriers that don’t have access to
it will be left behind.
Partner, XL Innovate and Brett Jurgens, Co-Founder and CEO, Notion
(Views are personal)