Smart Homes, the dynamics of the market and the relevance of partnerships

05 Dec 2016

Smart homes represent an ecosystem of players across industries where common interests are shared. The ability of an insurer, an energy provider, a telco, security company or device manufacturer to better understand their clients through their data and subsequently create custom solutions will be key to the success of smart homes. The basis for the success of smart homes will be to persuade customers to adopt smart technology and share their data. Customers must trust that providing their data will be rewarded by delivering better value through an understanding of their behaviours and lifestyle. The translation of data into meaningful information and insights is key.

Value creation

For the insurance industry, value creation will come from matching the underwriter perspective with the customer perspective and partnering with others in the ecosystem to explore avenues for revenue creation beyond premiums.

Data handling

One of the biggest challenges for smart home insurance is respecting the sanctuary of the client’s own home while generating enough meaningful data. There are also issues of data security, ownership and sharing. The keywords are trust, transparency and context: customers may be willing to share data with companies they trust, for agreed (transparent) purposes only. They will be less likely to want to share data related to personal behaviour - unless they gain from doing so, as Facebook and other entertainment platforms demonstrate. Customers will happily share data in the context of risk reduction, but not if insurers only use the data to check for fraudulent claims.

Changes in technology

Rapid changes in technology raise the question of how smart home products will be maintained, by whom and at what cost? Good ecosystems will build in backward compatibility to devices already installed. Over the air updates are already really important, but are not without risk. From the insurance perspective it will be important to work with companies that are designing device agnostic solutions. Devices manufacturers and energy/telcos are partnering to adopt the business model currently used for smartphones. Clients will be able to get their devices for free if they sign 2 or 3 years contract with the energy provider or telco. The devices are subsidised by the energy/broadband tariff.

Liability issues

There are some major issues surrounding responsibility in the connected home. To move forward there will have to be basic levels of agreement between all the participants within ecosystems (i.e. the insurer, consumer, device manufacturer, outgoing service provider) as well as governments and institutions. They will also have to build models that allow for partial responsibility in liability disputes.

Home automation security

There are two approaches to maintaining automation security, the service model and the DIY model. The DIY model would suit about 50% of market customers, but there are still lot of potential problems. The subscription service model involves less risk for the customer and places responsibility on the provider to maintain the reliability and security of the network

Growth in the future

Renewing services to create future business is vital: eg as more customers generate power themselves revenue from energy sales is sinking. So energy companies are investing billions of euros to create new energy service offerings. The challenge for all participants in the smart home ecosystem, including insurers, is to create value that customers are willing to pay for.

"Translation of data into meaningful information and service is crucial in smart homes"

For more information:
Market trends and emerging eco-systems for smart homes
Latest technology and product offerings in smart homes
The role of insurers in the connected home

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Summary by David M. Taylor. This article is based on the "Risk Talk on Smart Homes" which took place on 21 November 2016 at the Swiss Re Centre for Global Dialogue.
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Critical Illness (CI) insurance is a living benefits product providing indemnity cover for major medical disorders including cancer. For each disease covered the triggers to pay a sum is defined according to clinical diagnostic criteria. With medical progress prompting evolving clinical guidelines, CI definitions become obsolete. The introduction of liquid biopsy might become a disruptor for the diagnosis of cancer with an urgent need to update the current CI cancer definitions and reconsider reserving for in force CI business.


Liquid biopsy is increasingly used in clinical practice and has the potential to alter the diagnostic cascade. This could affect our Critical Illness business. With more cancers diagnosed more claims will be paid. The aim of the Expert Forum on Cancer Diagnostics was to gather insights from experts to understand the potential impact from advances in cancer diagnostics, such as liquid biopsy, on Swiss Re's Critical Illness book of business.


The event was split into two; the first part focussed on cancer biomarker technologies and the second part on advances in imaging techniques and the regulatory environment for cancer diagnostics.


Kenneth Bloom, from Human Longevity Inc, kicked off the day with an overview of early molecular cancer diagnostics and targeted therapy in cancer care. He highlighted the role of molecular diagnostics in personalized medicine, disease monitoring and surveillance as well as the limitations of liquid biopsy for the early detection of cancer. Nicola Aceto, from the University of Basel, gave a snapshot on liquid biopsy, highlighting success stories and the need for further clinical validation of liquid biopsies before they can be used for the detection of early stage cancers. Vincent Mooser from the University Hospital in Lausanne discussed the use of germline genomics as a cancer risk indicator. Damian Page, from Roche, discussed the current limitations of diagnostics in personalized treatment from a pharmaceutical perspective.


The take home message from the morning session was that the use of liquid biopsies for early detection of cancer is still in its infancy. More clinical validation is needed before liquid biopsy can be routinely used for cancer screening and diagnosis. Liquid biopsies' primary strengths lie in the molecular assessment of minimal residual disease and as a companion diagnostic for targeted therapy. Early warnings about possible recurrence improve disease management and adjuvant therapy, and clues for drug-resistance allow for personal tailoring of therapy. However, the present gold standard for diagnosing cancer remains microscopic and histochemical analysis of a tissue biopsy.


Luigi Catanzariti, was the first speaker in the afternoon session. He discussed the use of companion diagnostics and the future of preventive immunotherapy for early stage cancers. He emphasized the fact that diagnostics collaborating is now an integral part of pharma strategy, but regulators treat drugs for targeted therapy and companion diagnostics as two quite different categories. Pierre Hutter, from Sophia Genetics, emphasized the importance of genomic data collection and how the data can be used to learn and improve predictive and treatment algorithms. Hans Hofstraat, from Philips, discussed the role of imaging technologies in detection, staging, monitoring and for follow up of cancer patients. He emphasized applications for personalized therapies and its value for staging cancer precisely. Thomas Hany, from a private radiology practice, closed the afternoon sessions with an overview of the use of imaging technologies in clinical practice, sharing insight with their limitations.


The take home message from the afternoon session was that imaging technologies play a vital role in localizing and staging cancer. This is needed for deciding on best treatment options, and for monitoring recurrences. The speakers highlighted the fact that imaging techniques play an important role for early detection for many cancers, mainly breast and lung cancer. However, even state of the art imaging is limited for early cancer diagnosis. Only when combined with other diagnostic tools such as liquid biopsy diagnostic sensitivity and specificity will be increased.


To conclude, modern cancer biomarkers and imaging technologies are extremely useful in the treatment and surveillance of cancer. However, no tumor marker or imaging technology identified to date is sufficiently sensitive or specific to be used on its own for earlier detection of cancer. Tissue biopsy will remain the gold standard for diagnosing cancer in the near future.<[if gte mso 9]> <[if gte mso 10]> <[endif] -->

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