The Smart Home of the Future
By Drew Doleski
With each passing year, I continue to be wowed by smart home innovations. As a professional who has spent the majority of his career working in the home automation industry—and as a consumer who drinks his own Kool-Aid (with a house full of tech to prove it)—it’s been exciting to watch the technology become more mainstream with increasingly expansive capabilities. That said, there’s still tremendous room for growth and evolution; the smart home of 2029 will look quite different from the smart home of today. These advancements will offer more meaningful ways to enrich users’ lives and create new opportunities for property/casualty insurers and other third-party service providers.
We’re just beginning to see the foundations of “smartness” in buildings and everyday objects. Short of a major investment in the sensors necessary to provide comprehensive home control and monitoring, there are still many gaps to fill. Further, the level of intelligence enabled by today’s software may imperfectly contextualize real-world actions and events. The smart home industry needs to develop more meaningful and cost-effective solutions as it seeks to increase consumer adoption. Here are a few of the emerging smart home capabilities and trends that could bridge the gaps:
- Artificial intelligence and machine learning – As the volume of Internet-connected things continues to increase, the opportunity to transform data into accurate information and actionable insights grows ever more imperative. Advanced learning systems that can make intelligent assumptions will drive the “smart” in the smart home. These systems will distinguish between commands from a home’s various occupants, recognizing specific behavioral variables within the broader environmental context, and allow the smart home to more deeply integrate with technology from other facets of users’ lives, such as interweaving data from connected cars in increasingly comprehensive ways. The result is not just a more seamless user experience but a more cohesive connected lifestyle.
- Human/machine interaction – Personal voice assistants exploded onto the scene several years ago and have become a key driver of smart home growth. The ability to use one’s voice to tell a smart thermostat to adjust the temperature or to command a connected light bulb to adjust the brightness or turn on or off is far more user-friendly than fumbling for an app on a mobile phone. Yet smart systems will one day grow beyond voice and initiate changes with less human intervention or perhaps rely on new types of interactions to make decisions. For example, eyeball tracking—already in place to “unlock” some current-generation mobile devices—will be used to determine which lights in a room were intended to be turned on or off.
- Embedded sensors and longer-lasting batteries – Some of the most hazard-prone areas of a dwelling can be those least frequently accessed. Events that originate in a basement utility room, behind the drywall, or on the roof require new types of low-cost sensors. These devices can sit for many years awaiting low-frequency events, or they may need to detect subtle changes over time. To fulfill these use cases, sensors will be embedded in a growing array of home infrastructure elements, such as roofing shingles or plumbing and electrical systems, using energy-efficient power sources to provide ongoing monitoring without requiring routine battery replacement.
- Smart cities and connected infrastructure – The connected home will one day become yet another node in the fabric of a smart city. Utility providers have already begun by implementing smart meter technology that reveals more robust consumption data. Further, many municipalities are evaluating how they can leverage connectivity to optimize the delivery of essential services. To that end, it’s no surprise that many telecommunications giants have a distinct interest in providing smart home services on top of Internet and television connectivity. Open application programming interfaces (APIs) and new standards bodies will emerge to allow broad interoperability between in-home devices and local services.
The insurance opportunity
As smart home capabilities expand, consumer adoption will also rise. Consequently, new opportunities for property/casualty insurers will emerge to leverage the power of these connected devices and ecosystems to create new insurance products, improve business operations, and more effectively deliver meaningful customer experiences.
The quest for more detailed risk-related data has been and will continue to be a major theme for the property/casualty sector as it seeks to provide personalized pricing and more granular risk segmentation. To this end, a more contextually aware smart home can be a tremendously powerful asset as it delivers new levels of insight into occupants’ behaviors, gathers contents-related information, and recognizes risk areas that originate within a property. Insurers that can access this information at scale may yield significant advantages in risk selection and pricing. Because the smart home market is likely to remain highly fragmented, efficient data pipelines that allow insurers to access information from a broad range of products and brands—such as the Verisk Data Exchange™—have the potential to be powerful tools.
Some of today’s most popular smart home devices are built to enhance safety and security. Early event detection capabilities associated with these devices can help reduce both frequency and severity of loss for many preventable perils. Insurers should embrace this technology, act as a trusted source of knowledge for consumers as they evaluate product purchases, and continue to offer incentives for adoption of safety and security devices through more comprehensive premium discounts. Further, now is the time to begin participating in the smart home ecosystem—acting as a stakeholder in the creation of new business models to drive the right technology into the market.
The Internet of Things (IoT) promises not only connectivity with everyday objects but new avenues for insurers and other third-party providers to deliver innovative services. When it comes to smarter living, property/casualty insurers are coinvested with consumers in improved outcomes. Tomorrow’s smart home technology has immense potential as a tool for both groups. How will you influence the innovations taking place at the intersection of IoT and insurance?
Drew Doleski is a senior product manager for IoT/telematics and connected home solutions at Verisk (Nasdaq:VRSK).