Smart Home: applications and opportunities for insurance sector

From TV remote control to artificial intelligence, how the smart home evolves and what role the Companies can play in an ecosystem of services designed for the “shelter home” and for a new lifestyle

Published on 09 Jun 2020

Donatella Cambosu


house in the landscape by russian firm niko architect

Smart Home is defined as the set of software applications and connected devices that make homes safer, more sustainable, comfortable, healthy. The forefather of all Smart Home devices? The TV remote control. In the early years of the explosion of home automation, remote controls for window shutters were also very popular, although the potential for development was already obvious. Bill Gates, whose mansion near Seattle built about 20 years ago is still a “model”, is a great supporter of the smart home, where technology must first of all be invisible: for example, in his house each guest receives an electronic key that keeps communicating its location to the system, so that each room reacts in relation to its presence. 

Today, in the post-Covid phase, the Smart Home can widen its range of action and even deal with health: the players in this direction will be artificial intelligence, but also all those manufacturers of products and services that will be able to integrate into a new ecosystem, the Smart Home. 

Some data about the Smart Home market 

According to the latest report of the Osservatorio Internet of Things of the School of Management of Politecnico di Milano, the Smart Home is worth 530 million euros in Italy, with a growth of 40% year on year. It is a growing market, whose origins can be found in the days of home automation, yet in recent years it has regained great momentum thanks to the development of sensors, the Internet of Things and an ecosystem of products and services that allow this sector to better meet real needs. 

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All over the world the potential market for Smart Home solutions is huge and even in Italy a lot of progress has been made in the last two years, even if Italy still has room for improvement before talking about a real boom, 2018 was in fact the turning point for the Smart Home sector: not only the market grew by 52% compared to 2017, but the long-awaited smart home speakers have finally arrived. 2019, with a further 40% increase, has only confirmed the phenomenon. Smart voice assistants also act as a driving force for the entire sector, which has seen an increase in sales of various smart items for the home. However, Italy is lagging behind other European countries. 

Artificial intelligence and smart home applications 

Mark Zuckerberg's Jarvis

As you can see in this video that shows Facebook founder Mark Zuckerberg interacting in everyday life with his personal assistant Jarvis, who has the voice of Morgan Freeman, the smart house becomes almost ‘alive’, and is able to meet and in some cases predict the needs of its owner. 

Artificial intelligence is central to an application such as Facebook one or Home Speaker, the decisive technology for the future development of the smart home, a future where such intelligence will be fully integrated into the home itself and will manage it as a whole. The home speakers will then be outdated, as we will speak directly with the apartment. 

However, what applications are already available? 

Solutions, products and technologies for the Smart Home are increasingly widespread and can be combined in some main areas: comfort in the home, environmental protection and economy; people safety. In particular in the Italian market such applications are spreading: 

  • Air conditioning/heating (air conditioners, thermostats or boilers adjustable remotely or via App); 
  • Household appliances (remote on/off, via App or with your own voice, of dishwashers, washing machines, microwave ovens); 
  • Lighting (switching on/off, colour or intensity adjustment via App or with one’ s own voice); 
  • Security (video surveillance and video entry systems with the possibility to access images remotely and/or from Smart TV, intelligent locks that send alarms in case of intrusion); 
  • Smart home speaker (devices that can be controlled by voice to receive information – e.g. weather, traffic – and to give commands – e.g. adjust lights or temperature). 

Smart Home Speaker: The boom hits with the coronavirus 

In addition to masks and social distancing, Covid-19 has given us the touch paranoia. On the other hand, official recommendations also suggested to wash our hands often and clean the house and all surfaces more thoroughly than usual. Suddenly, the usefulness of voice commands was immediately apparent to everyone. Result? 

According to ABI Research, in early 2020, sales of voice control devices will grow globally by almost 30% compared to 2019. Thanks to home speakers we will be able to control TVs, light switches, thermostats, door handles and more. And maybe we’ll even be able to shop online. 

All of this if, in addition to the home speaker, we get patience to connect all the other devices in the house and maybe modernize them. Google Home and Alexa or the butler Jarvis from Facebook, they don’t work by magic, they need to be connected to the rest of the house. 

Smart home, security and privacy 

Any digital device is vulnerable to cyber attacks. As the number of connected devices grows, so do the threats of cyber attacks, but at the same time awareness and attention to this issue is growing among manufacturers and consumers. The same growth of the market is linked to an awareness of cyber security: who wants to live in a house where every electronic device gets stuck, the doors don’t open anymore and the heating gets crazy? 

Yet the issue is not only that, there is also privacy to consider. 

Smart Home solutions collect a huge amount of data often with the aim of fulfilling their function, just think of energy efficiency devices; otherwise, to help us improve our experience; they often collect in our total unawareness: there is already a lot of controversy about the fact that Amazon and Google’s assistants can spy on us. 

The GDPR was created to preserve people’s privacy, so Smart Home companies in Europe need to prove compliance with the GDPR and those who want to enter the European market in the future will need to comply with its security standards in order to sell smart products, so as to ensure the security of the data collected and provided.  

From this point of view, the insurance providers that will enter Smart Home with their offers are called not only to compliance, but also to an ethical culture of data where the growth of the volume of data collected also increases the value of the service offered to the final customer. 

Smart Home and Insurance 

Insurance can play a leading role in the Smart Home ecosystem. Traditionally, insurance companies have always taken care of our homes, offering coverage for a series of inauspicious events (damage, theft, etc.) according to the typical pattern of compensation after damage has occurred and been verified. The digital transformation has enabled insurance companies to make a very important qualitative leap in their value proposition, moving from simple damage coverage to damage prevention, and some companies have already started in this direction. 

But in the future, much more can be achieved. 

Insurance can be the channel to make our homes smarter and pioneer advanced home services no longer just as a ‘property’ but as a space that welcomes the entire lifestyle of the person, his or her shelter. 

Smart working, physical activity and entertainment, telemedicine, e-learning are the new topics related to the home born from quarantine, but that will remain in the post-Covid. These topics offer insurance companies new insights to create innovative services and also a different way of relating to the customer, the ‘smart home’ can be a new touchpoint. 

According to McKinsey’s analysts, Smart Home will be one of the 4 most important technological ecosystems for insurance in the future, the one in which innovative services can be developed, for example, with reference to Ambient Assisted Living technologies, a sector that is then associated with connected health, which is particularly relevant due to the ageing of the population and now also the risks associated with pandemics. 

International Smart Home startups 

For insurance companies looking for the smart home market, the fastest way is called ‘startup’. 

In a context of open innovation, startups can bring to companies not only their technology, but also their lean culture, creativity and skills, and new business models can develop from such a synergy. 

Like, a Denver-based startup that recently raised an investment of $11 million. It is a voice-activated artificial intelligence, which not only stands fearless of Alexa and Google Home, but to differentiate itself leverages the feeling of rejection (increasingly widespread in a certain segment of the population) that BigTech can generate. Every flaw of Alexa (e.g. data processing and privacy) is the added value of Josh, who addresses the high-end customer. 

This artificial intelligence is potentially able to control any other device in the house, just by connecting and programming. In addition Josh understands natural language very well and is able to easily learn, according to the company. Even complicated questions can be programmed effortlessly, such as: “At dawn, if I’m home, slowly turn on the bedroom lights, open the curtains, turn on the radio and make a coffeepot. 

Perhaps if there was an insurance partner in this relationship, Josh could answer, “Mr. Stark, your sleep has been badly impaired, your temperature is altered this morning and your blood pressure is high, it would be better if you had a green tea and stayed home. Your insurance company is offering you a video medical consultation at 9:00 a.m., do you accept?” 

According to CBInsights, Smart Home startups are really diversified, though can be collected in the following categories: 

Energy & Utilities: These are companies using sensors, monitoring technology and data to save water and energy. Among these are companies like Tado, which has created a product that automatically detects a user’s proximity to the residence and adjusts the temperature accordingly, with additional control from smartphone apps. 

Smart locks: Startups like August provide alternatives to traditional keys with virtual keys and other electronic locks. Some products from these companies also allow users to see and talk to remote visitors. 

General solutions for the smart home: instead of producing a single smart gadget, these companies build or distribute multi-device systems that automate different parts of your home, such as security, weather, air and energy care and monitoring solutions from Netatmo or smart apartments from IOTAS. 

Kitchen and Appliances: These include household products that function like a household appliance or conventional device, but offer benefits through connectivity, such as Innit, which is currently developing a self-learning cooking system and high-tech sensors that can detect what is being produced and adjust the heating and cooking time appropriately throughout the process. 

Domestic robots: This category includes companies that produce specific robots for maintenance and service in the domestic environment. These include the robotic social worker Jibo, and Rokid, a smart home device that uses artificial intelligence and deep learning to provide information and perform tasks through voice and visual interactions. 

Monitoring and Security: These are companies that offer security and monitoring inside or outside through cameras installed to keep an eye on homes, children, the elderly and pets. Companies in the space include Smartfrog and Ring. 

Wi-Fi and Cybersecurity: These startups provide Wi-Fi and cybersecurity solutions to connect and protect smart devices in the home. Such as CUJO, a smart firewall that protects a connected user’s home from criminal hackers, and Eero and Starry, two other companies offering home Wi-Fi systems, which have made large investments. 

Health and well-being: These products help home occupants maintain their health and lifestyle, such as Sleepace, a smart, non-wearable device that can monitor and help improve sleep quality, or Awair, which detects irritants in the air and the environment. 

Alarm Systems: These companies provide traditional alarm systems equipped with advanced monitors and sensors to detect fire, flood or other property damage and help protect your home. Cocoon Labs, a company, has developed a smart home security device that uses low-level sound waves to detect and warn the owner of any disturbances in the home. 

Audio and Media: These companies provide multimedia solutions ranging from a hanging computer to display decorative art (Electric Objects) to wireless music systems throughout the home (Sonos). 

Platforms: These companies do not manufacture their own consumer products, but help others integrate AI and connectivity into their smart home products. An example would be Arrayent, which helps major consumer brands transform traditional products into connected devices. 

Lighting: These companies provide home lighting solutions such as smart switches (Deako) and smart bulbs (LIFX). 

Miscellaneous: Startups in this category have particularly unique offerings, such as Uzer, a company that developed a smart home barcode scanner that makes recycling more fun and efficient, or Nucleus, an Internet-connected intercom system that helps people communicate with others on the same system. 


Today is a fact that we are still talking about many single solutions for the ideal Smart Home; but the real Smart Home will be the one where everything will be connected and all the technology will be invisible, it will be the one where a single artificial intelligence, maybe integrated by design in the construction or maybe supplied together with a super comprehensive policy, will take care of the living space and its inhabitants. To reach this point, however, it is necessary to build the ecosystem, no company can work in the smart home alone. 


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Donatella Cambosu

Scrive di tecnologie, startup e innovazione da oltre 15 anni. Dal 2015 collabora con il Gruppo Digital360, in particolare con le testate Startupbusiness, University2Business, EconomyUp. Collabora con InsuranceUp sin dal lancio del portale avvenuto nel 2015 e ha maturato un'ampia esperienza in ambito insurtech.

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