Homeowners Could Benefit From New Breed of Security-Insurance Partnerships
|With two of the top four largest security installing companies forming partnerships with two of the three largest property and casualty insurance companies, the industry may be seeing the start of a larger trend that goes beyond the traditional discounted rates for homes with security systems installed.|
For years, security companies have used the long-standing practice of insurers offering discounts to homeowners who install security systems as a selling point. So it was only a matter of time before security and insurance companies would create formal partnerships with benefits to all parties. Two such partnerships were announced recently, with large-scale insurers to provide additional benefits and incentives to each other’s customers.
ADT, at the top of the SDM 100 report of the largest security companies ranked by their recurring monthly revenue, has teamed up with State Farm, the largest property and casualty insurer in the United States, according to the National Association of Insurance Commissioners (NAIC). The deal with allow ADT to provide special offers on its ADT Pulse home security and automation solution, including a free in-home security consultation, 24/7 monitoring and custom installation with a six-month money-back guarantee.
In turn, State Farm customers may qualify for home insurance discounts.
“The average insurance claim for a home burglary or fire can cost thousands of dollars,” said Don Boerema, chief corporate development officer at ADT. “Through home automation capabilities and enhanced security features, ADT Pulse is the ideal solution to help State Farm customers connect to their families and homes to mitigate loss.”
And in the insurance game, mitigating loss is good for business, but even better for homeowners.
“As the leading provider of homeowners insurance in North America, State Farm has a keen interest in helping customers prevent loss,” said Jack Weekes, operations vice president at State Farm. “By teaming up with ADT and other home control and monitoring providers, we are helping customers protect their family and property in today’s high-tech world.”
Home automation services company Vivint (ranked No. 4 on the SDM 100) found its insurance partner in Liberty Mutual Insurance, the third largest and casualty insurer in the United States, according to NAIC. Under the partnership, Liberty Mutual will offer Vivint customers savings on their auto and home insurance. The program is already in place, with marketing campaigns to roll out throughout 2014.
The similarity of the two companies’ goals was what made the partnership appealing.
“Both Vivint and Liberty Mutual have a shared goal of helping customers feel secure, whether that’s with reliable home security or quality insurance,” said Todd Santiago, Vivint’s chief sales officer. “Now, thanks to Liberty Mutual, Vivint will be able to help our customers simplify not only their lifestyle, but also provide savings on auto and home insurance as well.”
It remains to be seen if other companies will follow suit, but judging by the sheer size of the companies involved in these two partnerships, this might be the start of a trend. While these relationships are certainly good for business — offering each company exclusivity and the potential to grow their customer base — judging by the potential savings on both insurance and security equipment and services, homeowners could end up being be the real winners here.