(GROHE display at the InsureTech Connect 2018 conference in Las Vegas. Photo by author.)
Chubb (Zurich) has announced that it will partner with Hartford Steam Boiler (HSB) Inspection and Insurance Company, a unit of Munich Re (Munich), to begin installing Internet of Things (IoT) technology in the homes and businesses of Chubb policyholders. The sensors and devices will monitor for water leaks and changes in temperature, humidity, vibration and water pressure that, if left undetected, can lead to severe property damage.
Sean Ringsted, Chief Digital Officer and Chief Risk Officer, Chubb.
The agreement between Chubb and HSB is an early-stage development in the insurance industry’s move from being a pure indemnity business to one that is focused on prevention and mitigation, according to Mark Breading, a partner at research and advisory firm SMA (Boston). “The Chubb/HSB partnership is a great example of this, especially the fact that there are multiple devices and services involved, not just providing the homeowner with one device,” he comments.
As a result of the agreement with HSB, Chubb will install IoT sensors for early water leak detection the primary and secondary homes of its high-net-worth clients belonging to its Chubb Private Risk Services business. HSB will supply the sensors through its partnership with GROHE, a Düsseldorf, Germany-based global provider of luxury fittings for kitchens and bathrooms. The sensors are powered by the GROHE Sense Guard system, an intelligent water security system that detects water leaks, alerts the homeowner and shuts off the water supply automatically to prevent severe damage to the home.
Mark Breading, Partner, SMA.
In two other programs, Chub will install into clients’ homes advanced IoT sensors that monitor temperature, vibration and humidity changes, powered by HSB’s Sensor Systems. These will be positioned to help prevent damage to valuables such as fine art and wine collections, and, in the insurer’s commercial lines operations, in businesses and entities with environments sensitive to these factors.
“We’re excited to work with HSB, which offers best-in-class IoT sensors and device solutions,” comments Sean Ringsted, Chief Digital Officer and Chief Risk Officer, Chubb. “With active monitoring of homes and businesses through smart devices, we will be better able to help our clients prevent a total loss from a water leak or damage to a cherished collection of fine art or wine.”
From ‘Repair & Replace’ to ‘Predict & Prevent’
“This partnership will advance our evolution from a model of ‘repair and replace’ to ‘predict and prevent,’ which will fundamentally change the relationship between insurers and their customers,” Ringsted adds.
“Hartford Steam Boiler was founded on the principles of inspection technology and loss prevention, and we’re focused on building on our heritage through new IoT tools and partnerships, including our new relationship with Chubb,” comment Greg Barats, President and CEO, Hartford Steam Boiler. “We look forward to offering Chubb’s clients our proactive approach and proven solutions that use IoT sensors and monitoring to help prevent damage and property loss.”
Mitch Wein, VP of Research and Consulting, Novarica.
There is great potential for IoT to improve not just loss ratios but customer experience and customer engagement in personal lines, according to Mitch Wein, VP at Novarica and author of the company’s brief on Key Issues and Trends in High-Net-Worth Personal Lines.
Value to this customer segment includes but may exceed Chubb’s programs’ stitch-in-time benefits of limiting damage to property, Wein suggests. “This ‘predict and prevent’ repositioning may be especially valuable to high-net-worth customers,” he says. “For many in this segment, the time lost to repairs is actually a bigger issue than the cost of the repairs, so anything that helps avoid loss is especially valuable.”
Q&A: HSB CEO Greg Barats on the Engineering-Focused Insurer’s investment in the Internet of Things