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How Will Homeowners Insurance Break The Insurance Marketplace

[fa icon="clock-o"] May 21, 2018 10:43:27 AM [fa icon="user"] Mark Reilly [fa icon="folder-open'] the modern consumer, disruption in the insurance industry, consumer behavior

There is an old saying “only the strong survive.” I am not sure I agree with this. Plenty of strong will perish as well! I think the things that survive is not from strength but from adaptability. Too many people in business take on false positions in resistance to the marketplace. That has caused many staples of our economy to disappear right in front of us.

The marketplace is changing has changed. We need to adjust our way of thinking of the way we view customer's needs.


Quit Thinking Boomers vs. Millennials

Brian Solis, a futurist and author has promoted a line of thinking that takes our traditional ideas of segmenting consumers in age and or geographic groupings. He shared the thoughts of Kevin Delaney at Connected Futures Magazine:

not classified by age, etc... quote

Solis commented that this type of thinking misses the most critical shift in the development of a new demographic segmentation of:

Traditionals – Who are laggards and have still clung to media such as print news, yellow pages etc.
Digitals - This grouping is a blend of clinging to traditional medias but also are using digital technologies in their buying decisions.
Connecteds – These folks are as their title would suggest invested and dependent on technology and the mobility of tech.

So who is a Connected? According to Solis:

Gen C is psychographic quote

When it comes to connecting with our customers we have to stop thinking "Boomer vs Millenials." Instead we need to start thinking in terms of "Traditionals, Digitals, and Connecteds."


Homeowners and the Next Chapter in Insurance

I was recently speaking to a group of agents and company people at a state association’s annual convention on the topic of emerging risk. The one point I made is our industry is often thrown into the laggard category. Things change and our ability to serve these changes as an industry is often slow and plodding.

One of the subtopics in my presentation was about Smarthomes. In my presentation I spent more time on offering risk management tips to the attendees that they can share with their customers. Things like, making sure that their Smart technology is secure. But what I could not offer them was product solutions that have kept pace with these new home conveniences.

In the May 16th Insurance Business Magazine there was an articles that really caught my attention, Lemonade launches an open source insurance policy that anyone can edit. here's the link.

So now open source is getting ready to meet the insurance contract. I expect there to be resistance to this concept from insurers. That would be the natural reaction. In the long run though it seems like consumer demand will force competition to begin offering products that are more fluid and adaptable to change.  Again, adaptable will outlast strong!


Consumers Will Change the Insurance Industry

I recently came across a good Slideshare from 2017 titled “IoT: Disruption and Opportunity in the Insurance Industry.” It sort of validates the things that Solis has said. This Slideshare is from NTT Data and talks mostly about consumers and how they view insurance for the Internet of Things (IoT) especially in the home.

They use different terminology than Solis but the idea is the same. What it is boiled down to is do you know who your customer is? And I purposely did not use the term “future” with customer. Are you positioned to their needs and ready to deliver solutions where, when and how they want them?

NTT breaks down the demographics and breaks the Homeowners Consumer into two distinct groups; Keepers & Seekers.  Kind of like Traditionals & Connecteds.

homeowners insurance groups

From NTT Data “IoT: Disruption and Opportunity in the Insurance Industry.”

The graph above is an overall breakdown of several areas. One, is what is the income breakdowns of those, from their research, that are open to smart technology in the home. The other is an age breakdown. My two takeaways that really stuck out to me:

  • 60% were higher income households. (Isn’t that who you would want to attract)


  • The Age distribution of Smart adapters is equally split. So once again, forget Boomers vs Millennials.

There were two other things that really stood out to me in NTT Data’s presentation. One was that the leaders in IoT Smarthome Technology , names like Google, Amazon, Nest, Simplisafe etc, are looking for ways to bundle their products with other products, like Homeowners insurance! The 2nd thing that stood out is that the consumer is OK with my first point. They are open to change, especially if you are not.

So let’s look at the modern Smarthome groupings of Keepers & Seekers:

homeowners insurance customers segmented to two groups

From NTT Data “IoT: Disruption and Opportunity in the Insurance Industry.”

So Keepers:

  • Are older twice as many 45-64
  • They are tech laggards
  • They are happier with their current policy by almost double
  • They value their Broker
  • They put a high value on service and this would be a leading indicator for change with Keepers
  • If it ain’t broke don’t’ fix it

And Seekers:

  • They are younger, about 72% are between 25 & 34
  • Tech savvy about 77% are early adapters (Standing in line for the newest iPhone)
  • They are only so-so about their current policy on a 1 to 10 almost 75% have our product under a 7
  • Many Seekers want to know the cost savings of Smart Tech
  • 81% expect personalized unique service. (Kind of think when you buy from Amazon it suggests what else you would want)
  • Always make it better! Many of these want their policy to be changing and fluid with everything else that changes around them. (Lemonade knows this)


So What Does it All Mean?

If you are an agent, you do not have the same control as a carrier. We often have to sit and wait for the market to adopt and adapt. But one way to make a carrier meet the demands of the Seekers, is to find what is best now and let your carriers see you have adapted by your production. We must also keep in mind that the relationship part of it is in agent’s control.

The Keepers put a high value on service and Seekers value unique service. The common denominator is service. And that means being where they are, when they are there looking for you and your solution. Not you defining the relationship, but you accepting the terms of the relationship from the consumer.

You may not be able to control the innovation process of product solutions so then you must provide the relationship experience and the service your customers need based on their demographic segmentation of being a traditional, digital or connected.

Mark Reilly

Written by Mark Reilly

Mark is Sales and Educational Trainer for USI Insurance. Mark was an agency owner for almost thirty years in Ohio. He has been a well sought-after speaker and teacher in the insurance industry for twenty-six years. Mark is recognized as one of the top insurance educators, having been awarded the Jack V. Hedges Educator of the Year by Professional Insurance Agents Association of Ohio. His knowledge comes from years of study in his industry of insurance and risk management, along with the practical experiences of someone who has been in business for over 35 years as an underwriter, sales person and business owner. Mark is a Certified in Inbound Sales with Hubspot and is a Hubspot Partner. Have questions? Send him an email

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