Do Smart Buildings Really Benefit Commercial Property Insurers?

Do Smart Buildings Really Benefit Commercial Property Insurers?
There’s a lot of buzz about smart home technology, and this trend has extended over to commercial properties as well. As a result, the Internet of Things (IoT) presents today’s insurance carriers with a tremendous opportunity to deliver more value to commercial insureds and strengthen relationships. If insurance carriers aren’t taking into account the data that they can gain from smart technology to assess risk and provide value, they will soon be operating with an antiquated business model.
Smart Technology is Becoming More Affordable
In its infancy, smart technology was incredibly expensive, meaning that only large organizations with hefty budgets could afford to use it. However, this technology has become increasingly cost effective in recent years, giving businesses of all sizes and budgets the ability to benefit from it.

How Smart Buildings Mitigate Risk
Smart sensor technology is one way that businesses can transform their commercial properties into a data powerhouse for insurance carriers. Smart sensors can provide data on a wealth of systems in a building, such as lighting, water, gas, air conditioning, and security. Depending on the sophistication of the building, insurance carriers could use sensors to continuously measure occupancy, movement, lighting levels, security, fire control, and more, which could all be used more accurately assess risk.

Smart buildings also have the potential to prevent downtime. According to a recent study, 87 percent of business interruption claims are related to non-natural hazards, meaning that technical or human errors lead to the damage. If those buildings had smart sensors in place, many of the risks that resulted in property damage could have been predicted and avoided, which would have delivered a huge savings to the property owners and insurance carriers alike.

Smart sensors can deliver additional value to property owners by highlighting areas for potential savings, such as reducing energy costs. Despite these benefits, the adoption for smart building technology is still low, and much of this is due to lack of awareness. This means that forward-thinking property and casualty insurance carriers have a huge opportunity to educate property owners, which would increase customer loyalty and retention in return.

Using a Commercial Inspection to Educate Insureds
Conducting an in-person commercial inspection provides insurance carriers with an opportunity to educate insureds about ways that they can reduce risk, such as taking advantage of smart sensor technology. Since this technology is still fairly new, many property owners aren’t even aware that certain sensors exist or of the benefits that they can provide.

Our team at Insurance Risk Services has nearly four decades of experience in partnering with property and casualty insurance carriers to assist them with the commercial inspection process. When we conduct a commercial inspection, we are there on behalf of our insurance carrier partner, therefore serving as the face of your business. Our expertise, thoroughness, and level of professionalism will ensure that you put your best foot forward with insureds, helping to strengthen relationships.

Contact us at Insurance Risk Services to learn more about how you can use a commercial inspection to educate your business and deliver value.

We’re delighted to announce that Insurance Risk Services will rebrand to Davies in the near future.

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