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 running connected-home programmes report meaningfully lower churn among customers with active monitoring in the home. We have seen this in specific Nordic deployments, in defined segments rather than across a whole book.

Once someone feels genuinely looked after, switching for a cheaper premium stops feeling worth it.

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How many of our customers is this actually relevant for?

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, 75 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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When is the right time to offer it?

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.

One practical point that decides more programmes than the timing does: in markets where much of the book moves through tied agents and brokers, the intermediary needs a reason to raise it. Prevention products that carry no commission structure do not get mentioned, however good the proposition. That has to be designed in before launch, not discovered after three quiet months.

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How is this different from a customer buying a sensor themselves?

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. A sensor on its own does not help if no one acts on the alert.

That is what a prevention service adds: a defined response path, agreed before launch, with a named party accountable for what happens after detection. How that is built varies by insurer and by market.

Some want their existing assistance and claims network used, because they already have one and it works. Others want us to bring a response partner. Some want the alert routed to their own contact center.

We design around that choice rather than against it.  The sensor is tied to the insurance relationship rather than being one more subscription for the customer 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.