In the late 1960s, architect Richard Rogers came up with a design for his famous “zip-up” house; a modular factory built home made up of prefabricated insulated panels that spoke to his ethos of “do more with less”. It never made it into production but many of its themes of affordability and sustainability are increasingly in vogue today, as highlighted in our recent Hiscox Home of the Future Report 2015. Society is finally catching up with Rogers’ early vision as increasing urbanisation of the population calls for more affordable housing, while also being environmentally more aware and changing the way we live with the rise of dual hub and tri-hub homes (multiple generations living together).
For the insurance industry it’s fascinating, as we celebrate 25 years of Hiscox 606 Home Insurance (our high net worth homeowners’ cover), to predict how the high net worth insurance sector will need to stay one step ahead of these huge shifts in how we live and work if it is to maintain its relevance in the decades to come.
Wired for sound (and vision, and healthcare, and everything else)
Let’s start with the connected house, where superfast broadband connects not only services for media and entertainment but also utilities – energy and water use - and could even monitor our health. For insurers and homeowners alike, this connectivity could have huge advantages. If the remotely monitored heat readings from your home become too high, it could be an indication of a problem and the fire brigade can be on their way before there is lasting damage. A loss of water pressure might indicate a leak, triggering an app on your phone, and enabling you (or your insurer) to intervene quickly. The insurer of tomorrow may well be as much of a loss prevention expert as an underwriting and claims expert.
Of course, we won’t suddenly lose the built environment that we have today. Many of these technological changes will happen within the constraints of an old Victorian rectory, a Georgian townhouse or a thatched cottage. The expansion of technology could even create new threats if not installed sensitively and safely and insurers will need to work with policy holders to see the benefits of technology without the downsides.
Do away with stuff
The Hiscox Home of the Future report also talks about the rise of ‘accidental minimalism’ as we stream music and do away with racks of CDs for example, or take down those shelves of books to banish them to the cloud and an e-reader. That’s not to say that as insurers we can suddenly assume that people will not buy physical objects such as art for example, or enjoy the listening pleasure of vinyl records. In a way, technology is allowing many people to go back to basics while also enjoying limitless choice; you can stream almost any song you can think of but still enjoy the experience of playing a Led Zeppelin vinyl.
How will the use of technology impact the insurance buying process? There’s no doubt that customers want to see increased simplicity. In theory, as an underwriter, I could ask a potential customer one question: are you in your house? If they are standing there with their smartphone I can pinpoint their location via GPS, work out the footprint and size of the house, assess and rate the property from Google Earth and available data, all making the process very simple for the customer. No more lengthy proposal forms. No more “this is all too much hassle”.
Insurance buyers will also wonder why they need to arrange multiple covers for their various insurance needs. “Look after me and my family” might be the requirement, with a single policy that covers the home, life, healthcare, travel, cars...the list goes on. As high net worth insurers we need to recognise this changing demand, as do brokers. Simplicity, certainty, flexibility – age old customer needs that technology can help us to deliver.
Never stop pioneering
How people control their insurance may also change in the future. Crowd funding new business ideas, charities and so on is a relatively new phenomenon facilitated by technology. What if communities take insurance into their own hands by forming their own insurance companies – small captives meeting local demand? It’s possible, and we as an industry must be alert to the changes and make sure we’re part of it rather than looking on as bystanders.
Hiscox 606 Home Insurance pioneered high net worth cover 25 years ago, and we intend to carry on pioneering high net worth cover for decades to come.