February 9, 2012
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I don't know if it's still the practice, but years ago certain central stations in New York City had relationships with insurance companies so that the insurers would insist that its insureds used these particular central stations who would provide UL certified central station certificates. I know the certificates and level of service is still around, but not sure if the insurance industry maintains close ties with particular centrals. In any event, as the article below highlights, providing additional services not only offers additional opportunity for revenue, but you don't want to miss the boat if insurers start offering discounts to their insureds for services that you don't offer or provide.
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Ken,
Insurers are moving to subsidize innovation and provide alarm discounts for video verified alarms that deliver priority police response. They will encourage and help pay for the upgrade.
Once upon a time, alarms detected burglars; police responded and made arrests “ underwriters depended on 'loss control with a badge.' In fact, underwriters created the security industry in the early 1900s when they wired a problem Boston bank that then alerted the nearby telegraph office of a burglary. Police arrested the bank robbers and prevented a large claim. Underwriters built upon this success and pushed policy holders to install burglar alarms because they worked - police made arrests and lowered claims. The alarm/police response concept worked so well that underwriters soon mandated that all high-value policy holders such as banks and jewelry stores install UL certified intrusion alarms before issuing a policy. They also created alarm discounts in their contracts to encourage their other commercial and residential policy holders to install burglar alarms. This historic police/alarm/insurance model boosted profits through the 1970s, but the partnership lost its value, deteriorated and died.
We can now resurrect that partnership that created the industry.
The article (here is the link http://www.insurancenetworking.com/issues/2008_79/jentoft-loss-control-technology-29831-1.html ) just came out in Insurance Networking News, the most important publication serving the Executives in the Insurance Industry. They gave me an entire tabloid page and the editor even pushed the article in her column titled, 'Is Loss Control a Lost Art?'
I am giving a webinar to the Chartered Property Casualty Underwriters Society (CPCU). This is the largest organization of underwriters and members are from all the various insurance companies. They are giving CU credits And charging almost $100 for it. The link for the February 28 Webcast is below. Ultimately the underwriters are responsible for the decision as to whether to offer discounts or not. http://www.cpcusociety.org/page/184331/
Here is a link to the video created by Insurance Journal with the NICB (National Insurance Crime Bureau), the National Sheriffs Assn. and the CSAA pushing the partnership www.ijmag.com/LossControl
It is time the electronic security industry reconsider its value proposition and the stakeholders that we serve. The alarm industry's opposition to innovation for new systems ignores the major player in the value chain the insurer. Property/casualty insurers pay for 87 cents of every dollar lost to burglary, according to the Insurance Loss Control Association. In a very dramatic sense, the insurance companies are the real customer of the alarm industry, and they are demanding value. They see value in arrests to deliver loss control with a badge.
Thanks,
Keith Jentoft
President - RSI Video Technologies