A century-old insurer is evolving to help people manage the risks of everyday life, recover from the unexpected and realize their dreams in an increasingly hyperconnected world. The State Farm innovation journey extends beyond insurance products and into the ecosystems of connected things surrounding them.

Executive Summary

Back in 2015, in the first viral insurance innovation article he wrote ("Will Fintech newcomers disrupt health and home insurance?"), IoT Insurance Observatory Founder Matteo Carbone provoked the insurance sector, urging stakeholders to delineate their levels of ambition and their roles in the home and car ecosystems, and to identify ways of cooperating with other ecosystem players having like aims of creating services around an integrated set of customer needs.

At a recent conference, Haden Kirkpatrick, VP of Innovation at State Farm, described how the 101-year-old carrier has embraced a visionary outlook to sustain—and expand—its relevance to customers who, in Kirkpatrick's words, "now expect their insurers to understand them as well as Google and to deliver products and services as efficiently and cost-effectively as Amazon, all in a curated Netflix-style queue."

This article describes State Farm's existing relationships with ADT and other home ecosystem players, and future ecosystem capabilities for the insurer of the future.

State Farm’s challenge lies in meeting customers where they are against evolving consumer expectations—expectations that have undergone profound transformations over the last two decades. Consumers expect an experience delivered in a fashion as seamless and elegant as an Apple product, that understands them as well as Google, and is delivered as efficiently and cost-effectively as Amazon, all in a curated Netflix-style queue. (Guest Editor’s Note: Kirkpatrick spoke about this at the Future of Insurance USA 2023 conference. His presentation conveyed a palpable sense of urgency regarding the imperative evolution of the industry to the hundreds of insurance executives in attendance.)

The insurer of the future should adopt a mindset, approach and positioning more akin to that of a big tech company than a traditional insurance provider. Consequently, even in the realm of insurance, technology will emerge as the predominant catalyst for the realization of insurers’ strategic objectives (as prophesied in co-author Carbone’s 2017 book, “All the Insurance Players Will Be Insurtech.”)

The insurer of the future is expected to sustain its historical relevance with customers, as it has for many years in the past. As the IoT and its corresponding data expands, adopting a platform-level approach will be critical to putting insurers in a position to become a more integral and frequent presence in daily lives, providing value beyond the insurance policy alone.

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