State Auto signs on with smarthome data alliance as policyholder interest grows
State Auto is the first carrier to join smarthome-device company Roost’s Home Telematics Program, an initiative launched last June to help carriers glean actionable insights on data captured by Roost's sensors.
Program participants will distribute 10,000 Roost technology kits, including two water-leak sensors and one smoke battery, to selected customers. In return, Willis Towers Watson analyzes collected data to identify opportunities for insurance product enhancement and pricing accuracy. Roost’s mobile app also sends personalized alerts to consumers, as a means to improve loss mitigation.
Talks between State Auto and Roost began less than a year ago. The Columbus, Ohio-based carrier joins USAA, Liberty Mutual, Desjardins, Aviva UK and Hippo as insurance distributors of Roost’s smart-home devices. Those other companies, however, are not part of the full-fledged Home Telematics Program. The carrier now gains access to more than 200,000 combined years of homeowner data as part of the agreement, says Stacey Bitler, the company’s product director.
“As a regional carrier, we know we cannot get that amount of data in just a couple of months,” said Bitler, explaining that joining the consortium enables the insurer to get devices out into market this calendar year at a low cost.
State Auto plans to distribute Roost’s devices to new home policyholders, and has already built the offering into its digital quoting platform. The company has been more aggressive recently in exploring new digital technologies. It partnered with Cambridge Mobile Telematics to develop a mobile application for a usage-based insurance program back in September 2017. CMT’s DriveWell technology captures trip data that is later analyzed through data science to generate personalized driver feedback. State Auto also has an existing telematics program, Safety 360, which it launched in 2016.
And its innovation lab, State Auto Labs, is also looking closely at how to leverage sensors for homes, telematics for cars and wearable technology for workers’ compensation, managing director Kim Garland said last fall. The lab recently announced a new $25 million venture capital fund last fall aimed at bringing more insurtechs into the fold and expanding aforementioned initiatives. The company says it is open to joining other consortia tailored to other business lines or to gain additional data points not available through Roost devices.
“Similar to UBI, this partnership offers us opportunity on the homeowners’ side to look into new behaviors from consumers, and also interact more with them as well,” Bitler says.
A burgeoning market
The news comes as home insurers overall are increasingly interested in becoming risk-management partners for their policyholders, with the goal of preventing damage -- and claims -- from happening. Customers are interested in such services: Three in five home and renters’ insurance customers are interested in purchasing a device to install in their home that can detect, prevent or notify them or their insurance company in the event of a loss, according to a report from market research firm Parks Associates. Parks also found that 40% of customers would switch insurers if the carrier provided such a device.
According to Aite Group senior analyst Jay Sarzen, partnerships like those formed by Roost can bring key technology, like sensors, needed for such a change to homes at a faster pace. The consortium specifically also provides a needed resource for carriers that are not as well equipped to handle large influxes of telematics data.
“Carriers would need data scientists and analytics folks to guide actuarial decisions.,” Sarzen says. “Without them, you’re just getting a bunch of data.”
Willis Towers Watson, a partner in the consortium, has the ability to sift through unstructured data, and offer insights to insurers by region, Sarzen explains. Specifics range from average response times by policyholders in particular states to the amount water flowing into a flooded basement after a pipe bursts.
“The possibilities are endless,” he says.
The opportunity around insurance is why Roost shifted its distribution strategy from direct-to-consumer to one establishing insurance carriers as key business partners. The company found retail to be a tough business model, particularly as a startup with a new product, says co-founder and CEO Roel Peeters says. Shoppers are no longer able to find Roost products on store shelves.
“We launched the Home Telematics Program with the idea of bringing five to 10 carriers together, and having them share deployment and claims data," Peeters explains. “We found a ‘win-win-win’ scenario with insurance carriers. It offers much more efficient distribution, with the consumer winning in the end because they obtain these devices heavily subsidized by the carrier or handed to them for free.”