Insurance companies have dabbled in the smart home for years, testing devices that might help prevent leaks, fires, and robberies, and even subsidizing them in some cases. But unlike the automotive industry, where companies have used connectivity to price insurance by the mile, home insurers have been more conservative, generally offering a discount if you add a security alarm or maybe a connected smoke detector.
Hiro, a six-month-old startup in the UK, aims to change that with a new insurance product that people will buy monthly, and which offers discounts based on smart home products used in the home. The idea is that having a connected smoke alarm, connected cameras, and leak detection products in the home lowers a policyholder’s risk, so the policyholder should be charged less.
The idea isn’t new, but getting insurance companies to use connected devices as a way to lower someone’s premiums, or to build policies around connected devices, has been a challenge.
Back in 2014, I thought the high price of connected devices and the lack of perceived value for a certain subset of smart home gear meant that insurance companies would buy leak sensors and connected smoke alarms to give to policyholders. I was wrong. Insurers are interested in the smart home, but they need years of data on efficacy before they can change their underwriting policies. You can’t subsidize a leak sensor unless you have data about exactly how a leak sensor can affect a claim. You also need to know that the policyholder has actually put the leak sensor in their home, in the right place, and has connected it.
I recently wrote about how LexisNexis has teamed up with IoT cloud company Yonomi to validate which devices are in a policyholder’s home. That solves the problem of ensuring a device is actually in use. Hiro takes things a step further, providing the validation, a device discount, and an actual insurance policy.
Hiro has inked a deal with an undisclosed underwriter and plans to start providing insurance later this quarter. According to Hiro CEO and Co-founder Krystian Zajac, the plan is to start with the outside underwriter and over time (and after raising more funding) underwrite policies themselves. Zajac was the co-founder and CEO of Neos, another insurance company that relied on smart home gear to offer policies, which sold to Aviva in 2018.
In the meantime, Hiro is raising £2 million ($2.7 million) on the crowdfunding platform SEEDRS as well as talking to investors in the smart home and traditional VC industry.
With Hiro, a user would sign up on their mobile phone by answering a few basic questions, then let the phone scan their home network for discoverable smart devices. Once Hiro had the list of devices along with all other relevant information, it would provide a monthly price for home insurance, offering a discount based on the devices discovered.
Users will be able to rescan and see their prices change as they add new devices. And to purchase new devices, all they have to do is go to a shopping area on the Hiro app where they will find a variety of smart home products as discounts offered only to Hiro customers. In the demo version I saw, the discounts were substantial.
Hiro is only going to be available in the UK for the near term (Brexit apparently put the kibosh on a pan-European launch). Entering the U.S. market requires approvals at the state level, which will take time. I’m just glad we’re finally seeing home insurance that takes advantage of connected gear to deliver more value.