For years, insurance industry observers have been predicting that home telematics products would transform the insurance industry by forcing carriers to take on the role of damage preventer instead of just claims payer.
Insurers are still experimenting. But one company in particular — a Silicon Valley startup that launched in 2014 — is working to make sure that it will be the leading smart home product supplier to insurance carriers when that transformation finally happens.
In the past month, Roost Home Telematics of Sunnyvale, California has entered into partnerships with Centauri Insurance, Duck Creek Technologies, and Farmers Protective Mutual Insurance Co. to place its water-leak detectors into policyholders’ homes. In the past year, Roost has signed up USAA, Armed Forces Insurance, Gulf Stream Property and Casualty Insurance, and CFM Insurance, to name just a few.
“I think without a doubt, we have deployed more than anybody out there,” said Roost Marketing Director David Henry. “We have been strong advocates of the industry. We don’t sell to consumers any more. We sell just to insurance companies.”
All told, some 25 carriers and claims organizations have entered into agreements with Roost. Henry says Roost has installed its devices in “hundreds of thousands” homes through agreements with insurers and is collecting a mountain of data that will provide insight on how well the technology controls losses and improves customer service.
In 2017, Roost contracted with Willis Towers Watson to analyze data from its sensors that provide metrics that will instruct insurers on how well the devices perform at loss control and improving customer satisfaction and retention. Willis operates a similar data analytics program with automobile telematics called DriveAbility. Henry said Roost hopes that an independent analysis will boost its customers’ confidence in the collected data.
Roost launched five years ago with the launch of its Smart Battery, a lithium battery equipped with a chip that can transmit alerts directly to cell phones. Later, it added a water-leak and freeze detector, a Smart Smoke Alarm and garage door sensors. Initially, Roost sold all of its products directly to consumers.
“We learned very quickly that the retail game is a very expensive game,” Henry said.
Henry said Roost recognized that far less capital would be needed to market to insurers than consumers. He said data collection will drive value. As of now, insurers have not collected enough data to price insurance policies that include home telematics and have no clue as to their impact on losses. But the information is coming.
“Things are going in the right direction,” he said. “We will have that statistically relevant data here in the near future.”
Henry said Roost does not have any serious competitors in the insurance space.
“Our main competitor is general apathy,” he said, “the slowness of insurance companies to react to new things.”
Florida-based Centauri Insurance was the latest carrier to team up with Roost, announcing a partnership last week. Chief Marketing Officer Felicia Cox said the carrier will distribute Roost water-leak detectors to 2,500 policyholders. She said the carrier will target consumers who have properties that have had water damage previously, and whose owners have demonstrated technical savviness by using the carrier’s Internet portal.
Centauri customers enrolled in the pilot will also have access to weather alerts provided by The Weather Channel.
Cox said Centauri has been issuing water-detection devices to “high-value”customers, meaning with property values of more than $1 million, since its inception in 2011. The Roost partnership will allow the carrier to find out if its customers are actually interacting with the technology.
Cox said Centauri expects demand for smart home devices to grow as consumers become more familiar with the technology.
“This is going to play a tremendous role in the industry,” she said. “These devices are going to allow us to have more peace of mind, from the policyholder’s perspective.”
Duck Creek Technologies formed a partnership with Roost last month so that the insurance carriers that use its claims administration products can receive the alerts sent by Roost water-leak and freeze detectors. Each carrier on its own will decide how to channel those alerts from the claims administrator to the policyholder, said Eddie Jones, vice president of strategy and alliances for Duck Creek.
Jones said the insurance industry is still in the experimental stage of its relationship with the Internet of Things, but Roost is offering a product that more and more carriers want to offer their policyholders. Jones said Duck Creek doesn’t form exclusive partnerships, but it hasn’t yet teamed up with any other smart home products supplier.
“They’ve got a real elegant solution to generating alerts related to specific perils within a property,” he said.
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