The ‘Internet of Things’, or just IoT, is a buzzword in the insurance industry that has seemingly sprung up overnight. While data collected from a multitude of devices in the home presents plenty of opportunities and challenges for insurers and brokers, the wave of products that properly lever this connectivity have only just begun to appear.
One company working within this space is HomeServe Labs, a division of home assistance and insurer HomeServe. CEO of HomeServe Labs Craig Foster spoke to Insurance Business UK
about the company’s new product LeakBot, and how it could change the way customers interact with insurers.
HomeServe Labs has been set up as a business functioning separately from HomeServe’s main offering. Foster said his brief was to figure out what IoT means for the company.
“It became really obvious to us that the internet of things is just going to have a huge impact on the home assistance industry,” said Foster. After working with a German company on a smart thermostat, HomeServe Labs turned its attention to plumbing.
Foster said the current solutions available on the market simply weren’t very good, so the company decided to develop their own. After a prototyping stage, Foster said his team hit upon something.
“We realised by using a combination of temperature thermistors we could detect a leak anywhere on the mains,” he said.
LeakBot is a small device that clips on to a house’s main water pipe. It uses its sensors to detect continuous water flow in pipes, sending an alert to a homeowner if water is running continuously for over 20 minutes. The small device is easily set up, doesn’t need Wi-Fi to connect and has a battery life of up to five years.
“If you’d have shown me two years ago the finished product that we’ve brought to market now, and asked me would it have been possible for this division of HomeServe to invent, patent, design and launch in house, I wouldn’t have believed we could have pulled it off,” said Foster.
The benefit of LeakBot is the early detection of slow leaks. Undetected, a slow leak could cause thousands of pounds’ worth of damage before it becomes obvious to the homeowner. If the leak is hidden, HomeServe also has a pressure monitor to detect the elevation of a leak based on water pressure within pipes.
While an alert might be sent during a particularly long shower or if someone is washing their car, Foster said customers have found it reassuring to know it actually works. The benefit of technology like this is it get over the apathy many customers feel when dealing with insurance.
“It really fosters an ongoing relationship with the customers,” said Foster. “A good reference point in a slightly different sphere is in energy utilities. When energy companies have started shipping duel fuel contracts with a connected thermostat, they typically see between a 50% and 60% reduction in customer churn.
“That’s because the user suddenly has more of a regular reason to interface with the company rather than once a year when their deal ends and they’ve got to think about whether they’ve got to switch somewhere else.”
HomeServe Labs is currently working to partner with insurers to distribute the small devices to their customers. Foster said insurers are just beginning to understand exactly what IoT can bring to their business.
“I think they’ve got the right mind set, and I think the type of sensors that we’re talking about, and the technology, will just trend towards being low cost, which just opens up lots of opportunities.”
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