Four questions insurers ask before adopting prevention - and our answers

For many large insurance companies, the proven reactive business model leads to good margins that make it tempting to leave a well-running book alone.

So why should these insurers add smart prevention solutions to their offering? And how can they make sure their customers see the value of such solutions?

In this blog post, we answer four common questions we get from insurance companies.

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Why should we offer this to our clients if we already have good margins?

Home insurance is commoditized. Customers often compare premiums purely based on price, and switching providers is fast and easy. A strong margin today does not change that; it just means the environment currently favors you.

It says nothing about how many new customers you are winning, or how many existing ones are quietly comparing you to a competitor at renewal.

Prevention works on both fronts. Today’s insurance customers are expecting smart solutions, and having one gives you something to sell besides price. Insurers that bundle a connected home solution with insurance have seen significant sales growth compared with standard home insurance in the same segments.

This underlines the results of a Guidewire study, which found that 80% of European insurance customers are interested in technology that alerts them to potential damage before it occurs.

On retention, insurers report 10 to 20 percent lower churn once customers have embedded hardware and active monitoring in their home. Once someone feels genuinely looked after, switching for a cheaper premium stops feeling worth it.

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What is the potential of customers we can reach out to?

Prevention only earns its place if there are enough of the right customers to justify it. This number is a specific, identifiable slice of your book, not all of it.

The clearest signal is housing age. In the EU, 86 percent of homes were built before 1990, with renovation rates near 1 percent a year. Older homes have hidden pipework and walls that make leaks harder to spot early, which is exactly the risk prevention addresses. Escape of water alone accounts for 25 to 50 percent of all home insurance claims across Europe.

Within that pool, three groups fit best: high-asset-exposure families, digitally engaged owners of older homes, and premium-segment customers with the willingness to pay for service. All three are identifiable from data you already hold: property age, home value, household composition.

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What is the trigger for our customers to buy?

Even the best-designed prevention product will not sell itself at just any point in the relationship. Timing matters, and it looks different depending on who you are talking to.

For someone who has just renovated a kitchen or finished a basement, the trigger is disruption. They cannot afford weeks without a functioning home, so prevention reads as insurance against exactly that scenario.

For a recent buyer or upgrader, the trigger is financial logic dressed up as convenience. A premium discount tied to a sensor feels like a smart decision, not a sentimental one.

For owners of higher-value homes, the trigger is exposure. A larger potential loss means a larger appetite for a subscription with a real response behind it.

The moment to offer prevention is when the customer is already thinking about risk: a purchase, a renovation, a near-miss, a renewal.

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What is the difference between your solution and DIY solutions?

Yes, a customer can buy a standalone sensor themselves. But it does not offer the same protection as a full risk prevention solution.

A sensor bought off a shelf will alert a homeowner's phone. If they are asleep, travelling, or miss the notification, the sensor has done its job, and the damage still happens.

That gap is what prevention-as-a-service closes: In case of a notification, a real team follows up and dispatches a technician when needed, and the sensor is tied to the insurance policy, not one more subscription to manage.

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The bigger picture

None of this requires an insurer to be in trouble to make sense.

It requires an insurer to notice that "good today" and "good in five years" are two different claims, and that the gap between them is usually filled by whoever moves first on differentiation, retention, and genuine customer value.

Want to include prevention in your insurance offerung? Contact us below.