At a glance
- Smart devices are becoming an increasingly common feature of UK homes
- While these Internet of Things devices can offer considerable benefits, customers need to be aware of the risks and how they can best be managed
- We look at what the rise of smart home devices means for customers, brokers and insurers
From Alexa to Hive, smart home devices are becoming commonplace, with research suggesting a quarter of UK homes now have at least one.
Internet of Things (IoT) devices such as smart locks, alarms and water leak detectors offer many benefits. Not only can they make our homes safer, more comfortable and more secure, they can also make our lives more efficient, by allowing us to operate different features of our home remotely.
However, there are also understandable concerns about the potential risks of some of these devices.
In recent years, there have been a number of concerns about vulnerabilities in smart tech products, for example flaws that could allow a cyber attacker to switch off lights or even disable an alarm. The UK Government has proposed adding labels to smart tech products to rate how secure they are.
Reducing smart device risk
There are a number of simple steps consumers can take to reduce their smart device security risk, such as:
- Only buying tech from reputable companies
- Carefully following instructions when installing products
- Choosing strong passwords and avoiding sharing them with others
Arslan Hannani, Head of Market Management, Zurich UK, believes cyber security issues with smart home devices will become less of a concern in years to come. “Providers are learning all the time. We are seeing a lot of improvements in the technology, and there’s more consumer awareness than there was a few years ago,” he says.
What do smart devices mean for home insurance?
Smart home devices such as alarms and leak detectors also have the potential to change the way home insurance is provided, for example leading to more tailored risk advice and personalised premiums for customers who use these types of device.
The greatest benefit could be the ability to provide a fully integrated service for home insurance customers – which is what Zurich is attempting to do through the Zurich Smart Home platform.
Zurich Smart Home incorporates a range of devices, from leak and smoke detectors, to cameras, door sensors, and more. All aspects of Zurich Smart Home are fully controlled by Zurich infrastructure. For example, when a device sends a message, it sends it to a secure Zurich platform.
“If you were to go on Amazon right now and buy a security camera, it might give you a message if it detects something,” says Arslan. “Zurich, however, has the power to detect something, send an alert, and provide help. We can send a home emergency person over, or a repairman, start a claim, or even call the emergency services.”
Zurich Smart Home is currently available to home insurance customers in a number of countries in Europe, and will soon be piloted in the UK.
Embracing a new age of insurance
For Arslan, the benefit for insurers and brokers in getting involved in the smart home revolution is clear.
“It’s primarily about providing peace of mind for customers,” says Arslan. “When you’re on holiday, and you get an alert that there is a fire or a dangerous leak in your home, what do you do? Those are the types of situations where smart insurance can really help.
“For insurers and brokers, there is a clear advantage to getting behind this technology. It’s not something you want to be late to the party on.”