One of the world's largest insurers is offering discounts for using connected alarm systems

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Zurich, one of the world’s largest insurance companies, is now offering a monthly discount on homeowner’s insurance premiums to customers who use a connected alarm system offered by Cocoon, according to SC Magazine.

If a consumer decides to install and use the alarm system, they will receive a 10% discount on their monthly home insurance costs.

The discount from Zurich is not particularly unique but highlights how insurance companies are valuing IoT deployments. Home insurance companies have offered discounts to clients on the installation of home security systems and corresponding lower prices for insurance premiums when such a system is installed for many years.

That's because a home with an alarm system is 300% less likely to be burglarized than a home without one. However, smart alarm systems add more value than nonconnected alarm systems because they add more insight into what is happening in the home through increased analytic tools and mobile applications.

As the smart home market grows in the coming years, insurance companies will continue to find ways to leverage the smart home solutions. In 2015, 17% of insurance companies had already launched, or were about to launch, a product that leverages smart home technologies, according to an Accenture survey. That's up from 5% in 2014, indicating a large YoY growth in the number of insurers leveraging smart home solutions.

There are several challenges for companies taking this approach, however, because the U.S. smart home market has yet to truly take off. Quirky's announcement that it was filing chapter 11 bankruptcy — and selling off its smart home business, Wink — highlights this well.

At its current state, we believe the smart home market is stuck in the 'chasm' of the technology adoption curve, in which it is struggling to surpass the early-adopter phase and move to the mass-market phase of adoption.

There are many barriers preventing mass-market smart home adoption: high device prices, limited consumer demand and long device replacement cycles. However, the largest barrier is the technological fragmentation of the smart home ecosystem, in which consumers need multiple networking devices, apps and more to build and run their smart home.

John Greenough, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the U.S. smart home market that analyzes current consumer demand for the smart home and barriers to widespread adoption. It also analyzes and determines areas of growth and ways to overcome barriers.

Here are some key takeaways from the report:

• Smart home devices are becoming more prevalent throughout the US. We define a smart home device as any stand-alone object found in the home that is connected to the internet, can be either monitored or controlled from a remote location, and has a noncomputing primary function. Multiple smart home devices within a single home form the basis of a smart home ecosystem.
• Currently, the US smart home market as a whole is in the "chasm" of the tech adoption curve. The chasm is the crucial stage between the early-adopter phase and the mass-market phase, in which manufacturers need to prove a need for their devices.
• High prices, coupled with limited consumer demand and long device replacement cycles, are three of the four top barriers preventing the smart home market from moving from the early-adopter stage to the mass-market stage. For example, mass-market consumers will likely wait until their device is broken to replace it. Then they will compare a nonconnected and connected product to see if the benefits make up for the price differential.
• The largest barrier is technological fragmentation within the connected home ecosystem. Currently, there are many networks, standards, and devices being used to connect the smart home, creating interoperability problems and making it confusing for the consumer to set up and control multiple devices. Until interoperability is solved, consumers will have difficulty choosing smart home devices and systems.
• "Closed ecosystems" are the short-term solution to technological fragmentation. Closed ecosystems are composed of devices that are compatible with each other and which can be controlled through a single point.

In full, the report:

• Analyzes the demand of US consumers, based off of survey results
• Forecasts out smart home device growth until 2020
• Determines the current leaders in the market
• Explains how the connected home ecosystem works
• Examines how Apple and Google will play a major role in the development of the smart home
• Some of the companies mentioned in this report include Apple, Google, Nest, August, ADT, Comcast, AT&T, Time Warner Cable, Lowe's, and Honeywell.

To get your copy of this invaluable guide, choose one of these options:

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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the smart home market.