Key Takeaways:
- The top risks insurers are leveraging peril focused tech to monitor and detect for.
- How these smart home programs are resulting in greater ROI for insurers.
- How the information collected through these devices and APIs is being used to elevate policyholder engagement and improve the overall customer experience.
Jeff Bales (00:11):
Okay, great. Thanks so much everybody for coming. Really, really glad everybody made it to what I think is the most exciting track of the day. So thanks for spending your lunch time with us. Look forward to having a really good conversation with my fellow panelists here. So why don't kick off with introductions and Jim, why don't you take it away first.
Jim Anderson (00:31):
Everything's okay. I'm Jim Anderson. I'm VP of business development for Whisker Labs, which is the maker of Ting, which is this device, which I'll explain more later. But as you can see on the slide there, we've had a great adoption over 300,000 devices deployed now in the US with a great adoption. Right. Continue. Go on from there.
Laura Hanson (00:59):
Great. Go ahead. Great. Hey, good afternoon everyone. I'm Laura Hanson. I am with Bird Insurance. We are Florida Homeowners Insurance Company carrier. We're a startup. We just got off the ground in the summer of last year. I know I did say Florida homeowner, but we're excited to be here and to talk with PEPPER and our colleagues here at Notion and tell you what we did.
Jeff Bales (01:23):
And my name's Jeff Bales. I am the Vice President of Sales and Business Development for an organization called Pepper. In late 2022, pepper acquired a company known as Notion. Notion, as many of you probably know is AI OT InsureTech focused product notion had a focus on kind of three core areas in the InsureTech iot space. One, we wanted to reduce losses and you can see from the first add up there when we are properly placed and sensors are focused on water, less than 1% of the water leaks that we catch result in a claim. We also heavily focus on helping our carriers manage retention. And over a 12 month period, you can see about a 5% bump retention with a ocean program. And then the last and maybe most important bucket is new customer acquisition. And with offering a smart home program like Notion that is a trusted and reviewed product along with the ability to apply a discount for that smart homeowners.
(02:24)
We also help companies acquire new users as we've kind of morphed into our new world at pepper. Pepper is a IOT platform where we can take many different types of devices and services and build out a white labeled digital experience, an app or website or whatever that program needed to be for the insurance carrier and provide them with an opportunity to scale their iot user base through integrating many different IOT programs under one roof and also creating a path for them to generate additional revenue streams through offering premium and additional services. Think of that from a cartel medic standpoint. It's like the roadside assistance, right? We can do that now from a home assistance program. So really excited to get with my panel here. And these truly, they are the experts. I'm just here to ask questions. So we're going to kick it off first with Laura and Laura From a carrier standpoint, what do you think is the biggest risk in home ownership and what is doing to help mitigate that risk?
Laura Hanson (03:28):
Sure, thanks Jeff. Please kick it off. So from a Florida Homeowners property perspective, the number one issue really is affordability. Floridians are just struggling in general to afford their homeowner's insurance and there's a lot of factors that are causing that insurance premium to just skyrocket, right? So we've got the cost of reinsurance is continually increasing with all the catastrophic events, but even outside cats, right? We have rampant fraud. So you look about some of the numbers, I think Florida represent about 8% of claims from a homeowner's insurance perspective, Florida represents, but yet we represent nearly 80% of litigation.
Laura Hanson (04:06):
Out there. So we've got litigation costs sky rocketing, we've got fraud. Then the other big issue for us are, you'd be surprised it is actually non-cat water event damage. So half of our water losses, so it's a little bit higher in Florida than it is. Oops, sorry.
Jeff Bales (04:20):
Keeps going in and out a little bit.
Laura Hanson (04:21):
Yeah, I think nationwide it's around 25% to 30% of water loss or our water loss is non-cat and ours are 50%. So the way we're thinking about it's if we can, we can't. Solve Mother Nature. We're Floridians, so we love everything that brings. The good and the bad. But we're looking for ways to manage and provide options for our policy holders out there. And so we can provide iot solutions to get ahead of the water, the non-cat water damage. We think we have a winning value proposition. And so that's what we've learned into. That's sort of our core value prop. We come to the table and we not only speak about the devices, but we integrate it into our offering. So it's part of who we are and the customers very well responded to it. So a lot I think we're going to keep going from there. So I can keep going.
Jeff Bales (05:08):
Yeah, absolutely. And I think one point I would love, maybe you could just touch on is not just maybe the customer experience with if a leak happens, I think that's something that I think is unique that Verde's doing that I think other carriers are, everyone I talk to is usually really intrigued by your approach in that space. So maybe if you can maybe spend a minute on that or that'd be great.
Laura Hanson (05:31):
Yeah, sure. One of the things we're really pleased about is that it wasn't just about giving the devices to customers and having them place around the home and saying thanks and washing our hands of that. We integrated it completely into our experience. And so I can give you some examples of that. It's actually part of our whole claims process and digital ecosystem. So if a water sensor detects a leak, we actually reach out either through our app, we do a push notification outside of what notion does. We give a nice timeframe and we're still experimenting with the exact right amount of time we give, but we come back after the top and say, Hey, we're noticing you still have a leak. Do you need assistance from us? And what we've integrated with is our emergency mitigation contractors, right? Because the key to getting ahead of the fraud and to support our customers and keep the claims clause to be manageable is getting ahead in the speed and getting our emergency mitigation contractors to the customer. So we ask them, we've learned that text messaging is actually a little better received than the in-app pushing because customers aren't hanging out looking at their insurance companies apps. So we have text messaging and those are being received really well. Do you need immediate assistance? If they do, we immediately connect them to our emergency mitigation contractor. It kicks off the entire claims process, we're calling them out, following up with text messages and emails and then it continues on from there.
Jeff Bales (06:48):
Yeah, that's great. Thanks for sharing that. So in addition to just identifying the key risk and making steps to prevent them, a lot of times when you talk about iot inside of insurance, everyone wants to talk about data and it's for very good reason. I think if you smash cut our five years, 10 years from now, you're going to be looking at a wealth of iot data that can help really provide insights into the home. So Jim, I thought it'd be good if you could maybe share a little bit about how Whisker Labs and Ting uses data and how they do that to impact their relationship with carriers and any type of benefit that delivers to policy holder.
Jim Anderson (07:24):
Yeah, I think it's a great question and certainly one of the values of home iot systems or just kind of peril related iot systems in general is that they bring data to insurers that they can use to improve their business. So for example, we have 300,000 home years of data from the work that we do. And in that constitutes about 4,500 saves what we call a save, which is identifying a cause or a risk within a home. So that could be a bad electrical blanket or a fault within the home electrical grid that is a cause of a source of arcing that would've resulted in a fire. And then you can use all that data and it's highly granular knowing the location, the exact piece of equipment or component that cause that problem. And then also ultimately we're developing predictive models to be able to model and predict electrical fire risk within buildings. And that'll be highly valuable for underwriters within that process.
Laura Hanson (08:36):
I can share from a verb perspective, we're in the early days, only seven months under our belt, but we're already looking to see what we can do to inform not just stopping a loss from ever occurring or getting there to minimize the loss or to reduce at least the cost of the claim, but we're actually looking at the data now to see if it tells us a little bit about more our customers, how can our product offering, what else can we be doing to be much more personalized in the coverage? Floridians are really, really engaging, very savvy about their insurance and homeowners looking for ways to save money and if we can get that coverage level just right. And so we think maybe the next evolution of our homeowners product could be maybe lower levels of water coverage if these devices really do not only alert, but the newer ones and other ones as we continue to evolve shut down the water from continuing so they truly do prevent it. We think we can do something different for our customers.
Jeff Bales (09:27):
Yeah, I think there's a gold mine of data that's going to be out there at some point. And if you think about just not only what we use it for today, but what we can use it from a future standpoint, I think if you look at data either inside of security systems, sensors, there's this ability to learn and understand the habits of what's going on inside of that home and how do we take that data and incorporate it into different parts of the insurance in insurance value chain. So right now we share data with all of our carriers. We largely focus it on systems being on and offline or different events that are happening, but where does it make to that next step of the evolution of it and start getting incorporated into the underwriting? And I think once you can tie those things together, and I think we're probably some time away from there, I think you're going to need some history and we're going to need some insights analytics that go along with it. So right now I think what we're really focusing on with a lot of our carriers is how do we share the raw data that they can now start incorporating into their systems, but then also provide them with that next level up of analytics and allow them to really incorporate that into their ecosystem right now. So I think data's one that we'll probably be talking about on stage here for many years to come.
Jim Anderson (10:39):
And I'd add one more thing out of this, if you think how many perils are there where we really don't know that much about the root cause or the causal chain that leads to them and now we can actually get a lot of data on that. I know just speaking of fires, 70% of home fires the cause is indeterminate. The insurance companies have very little accurate, you can claim data.
Laura Hanson (11:00):
Claim data that I can do from working at other carriers too.
Jim Anderson (11:03):
And suddenly we have tons of insight to add into that. And that's just one example. Yeah, you can go back and look at the telematics explosion within car insurance and we used to not know that much about what caused car accidents and now we know everything about driver behavior that causes them. So I think you'll see the same thing and the other types of kind of peril based iot that we're talking about here.
Jeff Bales (11:25):
Yeah, very true. So I think that kind of leads us really well to the next part or I was hoping you could maybe, I think you've touched on this already a little bit, but taking the I O T data and incorporating that into the claims process, and I know you touched on a little bit earlier, anything maybe a little bit deeper that you have regarding that, how you guys take data from sensors into your claims process?
Laura Hanson (11:46):
Yeah, so we're actually, like Jeff said, we do receive all the data from PEPPER Notion and we integrate that our data warehouse. So we're actually tracking and learning a lot more about the customer behavior. We're hoping that to continue to grow and it definitely has influenced and it really has increased the speed to be able to respond to our customers. And I think the other delighting moment was that we're getting great feedback from our customers, this is great, you're actually providing assistance in Florida. Everyone's taking costs through the roof and the fact that we're coming to the table with a solve makes everybody feel better. And when they feel that at those moments of truth when they're having a claim, they feel like we're actually trying to provide assistance and help. So there was these delighted moments that we actually didn't anticipate, but we've been tracking them and getting customer testimonials, which have been wonderful.
(12:33)
But are we seeing a reduction in the claims process? The good news is we've deployed about 5,000 of the devices to our customers. Lemme just pull up my number. I think we've tracked around 2,500 water events. Of those around 1900 have been what we consider a major event. We're still learning a lot and we're in the early days, but think about a major event, maybe that's something, a leak that lasts beyond around 15 minutes or more. And the customer, we reach out for assistance and two of them have started turn into a potential claim. But then as we went through the details, we literally have zero claims. So that savings on average to date, around $6 million for VER because our water non-cat water claims average around $12,500 each. And if you throw litigation in there, it can even go up higher.
Jeff Bales (13:21):
And just so everybody make sure here exactly what devices are you having in Mark now?
Laura Hanson (13:25):
Okay, we've deployed five 5,000 notion kits.
Jeff Bales (13:27):
Okay. I just wanted to make sure people got that.
Laura Hanson (13:29):
Did each have five sensors in them?
Jeff Bales (13:32):
I think we might've rehearsed too much. That was actually my next question was going into loss savings. So we heard the notion story on loss savings. Jim, why don't you maybe share with us loss savings that you guys have experienced with the Ting devices that's within the market.
Jim Anderson (13:46):
Well, and so the loss prevention efficiency on our ting sensors is 80 plus percent. So theTing cohort of homes has 80% less electrical fires than homes in general. And like you were saying earlier, well how do you determine that if you don't even know what the cause of the fires is? So we work with the NFPA, the National Fire Prevention Association and others, and typically about one in 2,400 homes will have an electrical fire. And the claims associated with electrical fires are very high. We talk about 12,504 water, it's more like 150,000 for electrical fires. So less frequent but really damaging. And so we're able to prevent about 80% of those over time. And what we've seen is that what also that value that you bring to the insurance company is really determined by the activation rate and what drives the activation rate simplicity.
(14:50)
And so one of the things that's great about this is it's an incredibly easy device to install. It takes two minutes, you plug it into a wall, you download an app, you Bluetooth into the device and plug your wifi into it and it's up and running. And we find that even after a year that the customer retention rate is 97%. So that's an engagement piece. And if you think about what drives ROI for an insurance company, it's activations, engagement, loss prevention, and then ultimately what we were just talking about, which is insights in terms of how you can drive underwriting benefits and things like that.
Jeff Bales (15:32):
That's a great segue into the next topic that I wanted to spin away from and go into how do we engage policy holders with this? And I think your conversation on installation rates is and right up there and making things really, really simple for the end user is such an important piece of this. One of the things that I talk about here at Notion, something I think that I know Ting does really well, I'm a Ting customer, does very well and I think we do very well, is the idea of buying an IOT device from a store versus getting an offer from your insurance company is very different from a actual customer. From the end user standpoint. They have a need inside their home like a thermostat. I want to be able to control it remotely and all those things. So they start this journey of buying journey for themselves when they're getting a leak sensor.
(16:19)
They've probably never looked for a leak sensor before. And since Notion is solely focused on an insurance market, they probably have never seen us in an Amazon search or something like that before either. So there's this big lack of clarity on what they're getting and how they're doing it. So we spend a lot of time focusing on that journey from when they get the offer to when it gets into the app and all those different checkpoints in between. And that's so critical to the value chain of IOT and how we can, because frankly, if our insulation rates are below 50%, Jim and I, we're probably not standing up here, we're probably on the streets looking for a job. That's the reality.
Jim Anderson (16:54):
And not only it just has a huge impact on the ROI Exactly. Because if we're having to ship a hundred sensors to get 50 of 'em deployed rather, or in many cases even worse than that, that somebody's eating that cost, right? Yeah. So yeah, it really boils down. I know our activation rates are trending above 80% right now from enrollment, and I think activation rates are largely driven by simplicity. It just has to be dead simple. And if you think about the evolution of home iot or building iot in general, there's plenty of business cases and examples out there of systems that were hard to implement and deploy. And one of the things we've learned over time is it just has to be super, super simple.
Jeff Bales (17:46):
And then the communication piece of it too, the emails from somebody from Ting constantly checking in on you, did you get your sensors installed? And I think Notion has a similar sequence of events, right?
Jim Anderson (17:56):
Yeah. And ultimately I think a lot of it has to be designed in, it just has to be simple to do if because tough to scale. If it requires a ton of handholding, if I need a technical expert to help me deploy it. And you see that, you know, don't want to call out anything in particular, but certain home security systems are tough to implement and obviously they've done a ton to make them easier, but it's not always that way. And then you could talk about other types of devices. It just has to be dead simple.
Jeff Bales (18:28):
So from a carrier standpoint, maybe walk us through some of the tactics that you've used to implement smart home programs and maybe share some successes and if you have any non-successful things, which I'm sure you don't with Notion, maybe talk about some of those too.
Laura Hanson (18:43):
Yeah, absolutely. And just as Jim said, the key was simplicity to get the customers to adopt and install. And so the great thing about the Notion product, it really was very straightforward and simple for our customers. And there was a group that felt, well, maybe our cohort was a little bit older, it skewed in the fifties, but we did a little research before we actually jumped into this journey. We actually partnered with Citizens, which is the large insurer in Florida, kind of the insurer of last resort, and partnered with them to actually do some surveying. And we found that the Floridian is quite tech savvy and is looking for ways to save money. And there really was no age barrier there in Factor. The over 55 cohort was pretty sophisticated. They were ready and willing and we didn't have to chase anybody down. There was definitely some nurturing in partnering with the team, and I think that's what's really great about the partnership with Notion is that the team brought a lot of that nurturing and really took on the ownership of getting the customer to activate their kits.
(19:41)
And we just had to get them into their hands and they were very much anxious to install them. One of the big learnings was that by marrying that up with the discount though was critical. So they're looking to save money. So I think an earlier test we did and here's a great device, we're giving it to you as your carrier to prevent damage. You're like, eh, that's great. We didn't really get the response and the adoption once we married it up with that 15% discount, we were off to the races. I think the other receptive, right? Yes. I think the other learning was is that we do sell through intermediaries, so we sell through agents. So our customers are responding really well to this, but we're finding that we do have to go back and do a little bit of a better job of engaging our agents.
(20:22)
So partnering with the marketing team on doing some webinars and spending a little bit more time there, getting into the right agents' hands there, we're finding that our customers, we are reaching out, we've got an amazing activation rate. Those are the kits that they've enrolled and gotten, they're activating up in those high seventies percent, which we're really proud of, but it's getting them to enroll. You're getting that great discount, but don't forget you have to enroll and get your kid, otherwise you could lose that. And they're finding when we reach out to talk to them, the agent just never told them. So we've got to go back and spend a little time with our agents and we're doing some more webinars, some follow ups. Once everyone's connected, it keeps moving. But there's some learnings there that selling through an intermediary is an extra step for us.
Jim Anderson (21:04):
Another interesting piece of this too is, and this is true with water, it's very true with fire that if the loss is something that's compelling to the end customer. So for example, we know with fire and people in general, so just psychologically we tend to overweight losses that we perceive as being catastrophic. How many of us worry about getting bitten by a shark even though it's never going to happen? So it's that kind of psychology that drives some of the adoption rate as well. Certainly with fire, people worry a lot about fires.
Laura Hanson (21:35):
That's very true. Yeah.
Jeff Bales (21:37):
So one of the last questions here is just how are smart home programs improving possibility engagement and customer experience? And one of the interesting things that we have a stat, I think it's 90% of notion current users were not monitoring for water previously. So I think Jim, to your previous point is this isn't something that they commonly think about. Nobody's sitting at home saying like, Hey, I hope my hot water tank doesn't have a leak today. I think for the most part, we expect the machinery inside of our homes to keep operating as standard, but insurance carriers are sitting at home, you're sitting behind their desk saying, man, how many hot water tanks are going to explode on us today and how are we going to pay for this claims? So there's this give and take there, and so there's this really important piece where we have to focus on providing them that incentive and almost telling them some of the law stories to help engage them and help incite them to then go out there and enroll in these programs to help us really speed up the adoption reform.
Jim Anderson (22:38):
Yeah, I jump in just, yeah, I was going to say, I think really good IOT programs with great engagement accrue a lot of customer satisfaction to the insurance company. I know we have the 10 crore has a 97% customer retention rate that's way higher than what most of our insurance partners our customers would have amongst their own cohort of customers. So there's a big, were talking with notion, there's a big bump in customer retention there. Our net promoter score is 74, so that's really beneficial to the insurance company. Our operating on the app store is 4.8, so good, well designed OOT programs with great customer follow through and engagement, really beneficial. One of the ways that we drive that is when we detect a fault, a hazard within a home, we actually have a process by which fire prevention engineers contact the homeowner, work with them to diagnose the problem further.
(23:45)
If it's in the home wiring, we actually send a technician, we pay up to a thousand dollars for a technician to come out and mitigate the problem. And so that solves the problem for the insurance company. They don't want to just know that their risk is there, they want it mitigated, they want the problem gone. And so that whole process drives a ton of customer value. That completely accrues back to the insurance company. And I think, like we were saying earlier, customers want partners in their life. They want people that are going to help them predict and prevent losses. And so they appreciate it when the insurance company, whether it's a water apparel or a fire apparel or other things is helping their customers solve a problem, prevent a risk. Honestly, the monetary loss is just one component of the loss. If it's of higher, it's all the hassle, the disruption of my life, the loss of priceless kind of property that I can't replace. So it's things like that anyway.
Laura Hanson (24:46):
Yeah, absolutely. And we've had, we're a little lucky in Florida that they're a little more acutely aware of what can happen with water and the damage that can occur, and they're just a little bit more tuned to that. So for us, there wasn't as much education, but definitely we hear it in our customer research where if a customer hasn't personally experienced or know someone, it's like, oh, it's nice. So a little education has really gone a little long way there. Our agents now that we're engaging them more and doing more webinars, they're phenomenal at just telling these stories for a few dollars, the peace of mind, think about the hassle, getting yourself back up and running and remind 'em that their homeowners isn't going to pay for getting them back up and running. It's going to pay for the damage, but it's not going to pay for all that headache that you have to go through. And so customers, they don't want to deal with any of that and they've just been delighted with it. They're like, this is the first time a carrier's ever given me anything. We've got testimonials in our research for customers. Really, I always pay the money out for my premium and I hope I never ever have to use it and never want to think about it. So just great moments.
Jeff Bales (25:55):
I love that you keep saying delighted or delightful. That's a really positive word you hear from insurance. Insurance care is using and their customer interaction. I think that's not something we hear often think about insurance. So if we can bring that language into no picture more often, that'd be great. So we're kind of getting close to time. I appreciate you both for the time spent up here. I have one last question for us all to answer. If you think of insurance and iot five years from now, what is that? Yeah, 30 seconds to craft a vision, go, Jim.
Jim Anderson (26:25):
I think embedded, I think more and more of these things will just be embedded in policies, but also I know for us the device will be embedded in other things that are in your home. I guess this could just as easily be in a smoke detector that's connected.
Laura Hanson (26:41):
Yeah, I think on the theme of embedded for us, I think I see the insurance product and the policy evolving. So instead of providing coverage for that damage, do we evolve? Because now if the technology just gets so good about the preventative nature of it and then the insurance product has to evolve as well. So we're seeing differences of the insurance being very different in the future itself.
Jeff Bales (27:03):
And I think both those are really good answers. I see. Maybe another piece of that is this idea that you can, many iot devices are going to be needed inside of a home and there's not one singular device that's going to be, this is the one device and no other devices are needed. So if you think about it, there's probably a subset of homes in your book, a business that are at risk for fire. I have a home that was built in 1913, so Ting, the device is very probably needed in my home. I really old knob into wiring. We know that homes built before 1976, I believe are more at risk for water damage of the piping that was used inside of those homes. So I think as you look at your ability to look at your total book of business and use data analytics coming off IOT devices and then look at the homes inside of that and say, okay, we're going to be more thoughtful in how we distribute and and promote these devices into areas of risk that we truly see and be able to cover more area that way.
Jim Anderson (27:55):
And I'll add one more just I know we've all been focused a lot on property casualty, that's your concern. But if I had to look five years forward, I'd say it's into a broad array of markets. I know when we look at the TAM for our business, it's every flammable structure that has power. So that covers it's 1 billion.
Jeff Bales (28:19):
It's not just homes.
Jim Anderson (28:21):
Every building that could possibly light on fire.
Jeff Bales (28:25):
Yeah, I mean, and water damage goes the same way, has water running. So you could, yeah, exactly. So yeah, so I think that puts us that time. I just want, again, I dunno if we do a Q&A, I guess I should have asked that before. If anybody has any questions, feel free to stop any one of us afterwards. We're glad to take some time and discuss further. But thank you so much for attending and look forward to discussing further with all of you.
Laura Hanson (28:47):
Thank you.