(The Ring device lets homeowners answer their door whether they’re home or not.)
Answering your doorbell turns out to be the best way to prevent a burglary, for the simple reason that burglars prefer to work in unoccupied homes. Applying that principle, American Family Insurance (Madison, Wisc.) has embarked on a partnership with Ring (Santa Monica, Calif.) whereby the insurer offers a $30 discount on the manufacturer’s $199 Ring Video Doorbell, and Ring will reimburse the deductibles of American Family customers if their Ring-equipped home is burglarized.
The Ring Video Doorbell can run on an internal battery or connected to an existing doorbell’s wiring.
American Family and Ring describe the Ring Video Doorbell as an easy-to-install, Wi-Fi enabled, HD video doorbell. Users can answer the door from anywhere using their mobile device. The device works with a built-in rechargeable battery or users can choose to can connect it to existing doorbell wiring. The device also sends motion-triggered alerts sent via the free Ring app (compatible with iOS, Android and Windows 10) to notify users of arriving guests, deliveries or intruders (see video embedded below).
The power of the Ring Video Doorbell is it enables residents to answer their door whether they are home or not. According to a UNC-Charlotte Department of Criminal Justice and Criminology report, most burglars, when selecting a target, consider indicators of increased security, including alarm signs, alarms, dogs inside, and outdoor cameras or other surveillance. Some reported ringing the doorbell several times to determine if the residence was vacated.
(Related: American Family Insurance’s Homeowners Strategy: IoT-driven Proactive Protection)
“We’ve analyzed the results from our global customer base and proved our initial hypothesis: The Ring Video Doorbell dramatically reduces the likelihood of home break-ins,” comments Jamie Siminoff, Ring’s Chief Inventor and CEO. “With this data, we can now stand behind our customers in an unprecedented way.”
Ryan Rist, Director of Innovation, American Family Insurance.
Given that only a small percentage of non-Ring equipped houses are likely to be burgled, Ring may have benefited from its distribution arrangement with American Family even if its device added only convenience. The fact that it does deter loss events only sweetens the deal. American Family likewise benefits on more than one level. With the deterrence provided by Ring, American Family reduces the probability of loss while enhancing its relationship with the policyholder. What’s not to like? Policyholders get a price break on a system with genuine value, they are further indemnified against risk by a promise to cover their deductible—and American Family has created another touchpoint, another way of being relevant in the daily life of its customers.
Beyond Indemnity
“We’re committed to providing value to our customers beyond just helping them recover from tragedies and accidents,” comments Ryan Rist, director of innovation, American Family Insurance. “We want to leverage technology and partner with companies equally committed to preventing those events from happening. We are excited to have created an industry first with Ring; our customers can voluntarily enroll in this program and have their deductibles reimbursed if burglarized.”
Karlyn Carnahan, Research Director, Celent.
American Family’s offering exemplifies a trend of insurers creating new products with embedded services, according to Karlyn Carnahan, research director, Celent (Boston). Rather than simply providing an insurance contract that pays for the loss or damage after the fact, carriers are including value added services to prevent the loss from happening in the first place, she observes.
Customer Peace of Mind
“Even if the probability of loss is low, the peace of mind customer gets from the service provides offers significant value,” Carnahan says. “Other examples we’ve seen of this type of product include the relationship Liberty Mutual and American Family have with the Nest product, the Vitality product offered by John Hancock, and a variety of telematics products which include fleet monitoring tools and driver monitoring solutions among others.”
“This new class of product is interesting,” Carnahan adds, because the services not only have the potential to reduce the frequency or the severity of the loss, but also create additional brand awareness, and in some cases, an additional reason for the customer to engage with the carrier outside of the normal insurance process.”
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Video from the manufacturer demonstrates the Ring Video Doorbell’s various functions: