Connectivity is happening right now and it's only a matter of time before application in homes is commonplace. 

The connected home is coming, there is no getting away from it. In many ways it's already here. The speed of technology development and adoption means that smart devices are already helping make our lives easier, and it's not a quantum leap to a time when these devices will be storing and sending data to insurers as a matter of course.

It's just a small part of the Internet of Things and it sounds slightly science fiction doesn't it? But it's very real and without doubt it'll bring change to the insurance industry.

Of course, elements of a so-called connected home are already well established - we can record TV remotely, watch our property from our smartphone while we sun ourselves on a beach miles away and even regulate our central heating before we leave work. But what is a truly connected home and what does it mean for our industry?

Think of a cross between a digital housekeeper and a health monitor for the home, maintaining your property and sensing any changes, detecting breaches of security and then choosing the appropriate smart device to react.

A system that will shut off your gas supply if it detects a leak, sense pending severe weather and prepare to record the damage, not to mention allow insurers to take a digital inventory and assess loss remotely, is not a work of science fiction but a reality.

Connected home technology offers as many opportunities as it does challenges with increased volumes of personalised data enabling insurers to know their customers better and understand their behaviours. At its most basic, this has to mean premiums customised to a more individual level.

At a more complex level, the data will help insurers establish risk and even, ultimately, prevent loss. Understanding lifestyle habits - whether a property is left unlocked for long periods of time, for example, or if it's particularly vulnerable to certain weather conditions - with technology that increases visibility around potential losses has to be a good thing.

The connected home also raises the thorny issue of insurer collaboration. Multiple devices, multiple insurances. Will insurers ever really pool data and information to get a 'whole customer picture'?

And then there's the big question of privacy - the invasion of Big Brother, watching, understanding and analysing our every habit. There's certainly a delicate line to tread between using connected home data to protect the customer and not intrude.

The connected home certainly throws up many challenges to the insurance industry, but it's exciting too. There's a whole new world of opportunities and challenges to explore and the industry will undoubtedly be testing and experimenting rapidly. Whether we like it or not, connectivity is happening right now and it's only a matter of time before application in homes is commonplace.
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