Insurance companies have been looking at the rapidly-growing IoT world of IoT for several years now. Getting into verticals like automotive has been relatively straightforward via per-mileage pricing for cars. Insurers can charge people based on how many miles they drive by consuming real-time data from sensors. Insurance in more privacy-sensitive verticals like smart homes is trickier, as those firms don’t directly own monitoring devices and tracking people’s daily moves is a delicate topic.
Partnerships with device vendors are a sensible approach, and insurance providers like State Farm have been going down that route. State Farm, one of the most well-known insurers in North America, will make a $1.2 billion equity investment in ADT, a leading provider of security, automation, and smart home solutions. ADT and State Farm stated they aim to combine next-generation security, innovative smart home technology and reimagined risk-mitigation capabilities to monitor, detect, prevent and optimize against homeownership risks.
The two companies envision new ways for homeowners to reduce costs through safer discounts by leveraging their combined experience in monitoring home security and insurance expertise.
The announcement will build upon ADT’s existing relationship with Google, which already invested $450 million two years ago. The partnership for improved home security resulted in ADT installing and selling Google Nest devices and the tech giant acquiring a 6.6% ownership in ADT. Following ADT’s partnership with State Farm, Google is committing another $150 million toward product development and employee training.
Overall, Google, ADT, and State Farm aim to use data from Google’s Nest hardware sold by ADT to inform insurance policies in the smart home. Privacy concerns aside, the combined work of smart home solution providers, tech giants and insurance firms has the potential to deliver a safer home ownership experience. Knowing professionals are working to monitor, detect and prevent risks of water, fire, and intrusion may finally bring long-awaited peace of mind to all homeowners.
Read the press releases:
ADT Announces Partnership with State Farm, Plans Innovative Offering That Combines Security, Risk Mitigation and Smart Home Capabilities to Revolutionize the Customer Experience [newsroom.adt.com]
State Farm Partners with ADT to Innovate Home Insurance, Investing in Smart Home Technology and Helping Customers Prevent and Detect Losses [newsroom.statefarm.com]
A partnership with ADT for smarter home security [blog.google.com]
ADT and Google Partner To Create Leading Smart Home Security Offering [newsroom.adt.com]
And tell us what you think!