Pete Miller | Risk & Insurance
The insurance industry historically operated on a reactive model — responding to claims after disasters strike. But growing data now demonstrates tangible benefits of proactive approaches, from IoT sensors preventing electrical fires to building standards helping homes withstand hurricanes.
I recently spoke with two Predict & Prevent® podcast guests who shared insights from recent studies and performance metrics providing the evidence that insurers, regulators, and property owners have long sought about resilience investments.
IoT Sensors Deliver Measurable Fire Prevention
Smart sensor deployment has reached critical mass, with Ting sensors now installed in over 1 million homes, saving approximately 20,000 homes to date. This scale has enabled comprehensive analysis of their fire prevention effectiveness.
“We’re able to document that we effectively prevent 0.4 claims per 1,000 home years,” said Bob Marshall, CEO of Whisker Labs. New research shows Ting has reduced fire claim frequency and severity, resulting in $81 per home per year in fire claims reduction benefits.
Beyond fire prevention, sensors detect water heater problems and prevent frozen pipe situations through AI analysis. “Frozen pipes are very high severity because they almost always happen when nobody’s home,” Marshall said. The network prevents an average of 25 new claims daily.
IoT sensor networks provide additional benefits beyond individual home protection. Collective data from millions of Ting sensors provides unprecedented visibility into utility grid operations and stress patterns.
“Our sensor network is the most definitive and authoritative source for what’s going on with the grid bar none,” Marshall said. “We know more about U.S. utility grid operation than anybody else.”
This monitoring capability has implications for preventing utility-sparked wildfires, as seen in recent California and Hawaii disasters. Sensors can help utilities make informed decisions about power shutoffs during high-risk conditions.
Hurricane Data Validates Resilient Construction
Recent research on resilient building standards’ ROI is equally compelling. A groundbreaking study of Hurricane Sally’s impact on Alabama homes shows how homes built to the FORTIFIED standard, developed by the Insurance Institute for Business & Home Safety, perform in a real disaster.
“This is the first test of FORTIFIED performance on a critical mass of houses,” said Dr. Lars Powell, director of the Center for Risk and Insurance Research at the University of Alabama, which conducted the research. “We had 17,000 FORTIFIED houses in Alabama, almost all in the hurricane zone.”
Hurricane Sally, a strong Category 2 storm with gusts up to 125 mph, provided ideal conditions to test resilient construction engineering principles. Results were striking: FORTIFIED homes significantly outperformed conventional construction, even after controlling for location, wind speed, and other factors.
“Our biggest insurance problem isn’t so much an insurance problem as a how-we-build-houses problem,” Dr. Powell said.
By building to Gold FORTIFIED standard and retrofitting roofs to the FORTIFIED Roof standard, communities can substantially reduce insurance costs and deductible/rebuilding expenses after storms.
Previous research shows FORTIFIED homes sell for 7% more than conventional houses, providing two compelling data points that strengthening homes improves value and reduces severe storm damage likelihood.
With concrete performance metrics now proving resilience investments deliver measurable returns, insurance and risk management professionals can be more confident that proactive risk reduction will deliver a powerful ROI.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.