Transforming insurance from premium collectors to active vigilante

Thesis project for MA Service Design at the Royal College of Art 2021

Why insurance?

Entire generations are moving to undo years of environmental damage.

Solar power is more affordable and accessible than ever before. People are moving towards becoming energy self-sufficient by relying exclusively on solar power and battery storage unites, which are becoming more and more efficient. Although this transition is encouraged, this movement will have a huge impact on multiple sectors including the insurance market.

I’ve decided to explore how such transition might affect the relationship between policyholders and their carrier and how their needs might transform the insurance industry.

How will these self-sufficient homes affect policyholders?

When it comes to self-powered homes the major risks are associated with weather volatility and fluctuating energy production. Running out of energy can cause major damages to you and your home, thus discouraging insurance to cover damages.

Current leaders in the electric sector are already providing you with powerful battery storage, which can easily power your home for several days in case of catastrophes. Having this type of backup will lower your risks of having damages in case of blackouts.

How will a self-sufficient home insurance look like?

The new role for insurance will be to become active vigilanti for policyholders. By detecting a possible risk they are able to alert their users and avoid the accident to happen in the first place.

Parametric insurance based on the amount of energy saved

In order to avoid home property damages, you need to be able to save energy when needed. By having your premium linked to your battery storage, you are nudged to have it always charged by adjusting your premium: the more energy you have, the safer you are, the less your premium will be.

Protection scheme integrated into the product

The user can add the coverage when purchasing the product. In this example we can see how the two industries can benefit by collaborating.

How might we protect policyholder living in a self-sustaining home so that they can  limit the damages to their property?

Scenario:

It is the year 2030 and the Paris Agreement act is continuing to make changes. You have recently bought a home which is completely self-efficient. You choose Tesla as your energy provider which includes having their solar glass panels on your roof and a Tesla Powerwall battery storage unite which will also act as your car charging station. You also have a Tesla car which can be used as an extra battery storage in case of emergency.

Weather alerts and suggestions on how to save energy to be prepared