Editors' Cuts

Google’s Moving In

Chris McMahon
Insurance Experts' Forum, January 14, 2014

Google has agreed to buy Nest, creator of “smart” thermostats and smoke alarms, for $3.2 billion in cash. And while the word “insurance” doesn’t appear anywhere in the press release, or in any of the other versions of this story I’ve read this morning, “the internet of things,” which is one of INN’s Top 5 Trends for 2014, does. And, the potential applications for P&C insurers are many, if not immediately apparent.

The Nest devices use sensors and Wi-Fi connectivity to learn individual household habits and manage the heating and cooling of homes. Connectivity enables the company to learn the habits of all users, which could be aggregated and used in any number of ways beyond heating and cooling, including conservation or sales and marketing of energy and energy-related products.

That combination of real-time data collection from remote sources, wireless connectivity and analytics could affect virtually every aspect of insurance.

In October, the company expanded into smoke and CO2 alarms with Nest Protect. The device includes a photoelectric smoke sensor, CO sensor, heat sensor, light sensor, ultrasonic sensors and activity sensor. Together, they analyze smoke and CO levels, Nest says, and can its LED lights can light your path through the house. Like the thermostat, the smoke and CO2 alarms are wirelessly interconnected. Homes that have both the Nest Learning Thermostat and Nest Protect, a free Nest user account allows the products to work together. If Nest Protect’s carbon monoxide alarm goes off, your Nest thermostat automatically turns off your gas furnace, a possible source of poisonous carbon monoxide leaks.

Home security devices are likely not far behind for the company, which professes to reinvent “unloved but important home products.”  And partnerships between home alarm companies and homeowners’ insurers are increasingly common. Access to the sensors inside a home could offer a wealth of data, and vastly improve and increase the number of opportunities for risk mitigation.

As Mark Breading, a partner at insurance research and consulting firm Strategy Meets Action, said in a previous interview on internet of things: "You get a better view of the real-time risks. It's not just that you understand the risks better and give them a better price. You can understand that the furnace has blown out and the pipes are starting to freeze, for example. And you can take action against that."

Chris McMahon is a senior editor for Insurance Networking News.

Readers are encouraged to respond to Chris by using the “Add Your Comments” box below. He also can be reached at chris.mcmahon@sourcemedia.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

3 Reasons DevOps Matters

Every insurer needs to compete on products and information turned around in light-speed fashion.

Coordinate Coverages to Manage Social Media Exposures

The bottom line is that no one policy will cover all the exposures in the social media realm.

The Internet of Things: Helping Insurers Make Better-Informed Decisions about Risk

The IoT is a major game changer for the insurance industry, and will likely affect every part of the insurance value chain. After all, insurance is data-driven, and that’s exactly what the IoT can deliver—relevant, actionable, real-time data that can provide an accurate picture of what is being—or may be—insured.

Software-Defined Everything

What does it take to virtualize all the key components in your data center?

On Thanking the Regulator … Really

The Financial Conduct Authority is demanding higher standards of consumer protection from insurers, which could lead to greater customer engagement and understanding.

Competing with the Coasts for Tech Talent

Are heartland-based insurers at a recruiting disadvantage for tech skills?

Advertisement

Advertisement