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MacGuard Insights: The ADT & State Farm Deal

The recent announcement that ADT has secured an equity investment totaling $1.2 billion from State Farm, has the industry buzzing about bigger things ahead, including the impact on the smart home.

According to a recent article on SDM, the collaboration between the two companies reflects the increasing momentum of insurance organizations as a channel for purchase or distribution of smart products. The benefits of the partnership are numerous, including discounts offered by insurance providers to users that have smart home products installed.

Kirk views the partnership between ADT and State Farm as a smart move by both companies. State Farm has already been at the forefront of offering discounts to policy holders with a functional, monitored security system. With added smart home offerings such as water-detection sensors, ADT can alert homeowners and other agencies quickly to this type of catastrophe, reducing the amount of damage to a home. According to Traveler's Insurance, 77% of homeowners' claims come from five causes: wind, non-weather water damage, hail, weather-related water damage, and theft.


Kirk believes, "The impact on the smart home sector will be additional awareness and some market expansion. You can expect to see additional like announcements from competitors to ADT." He goes on to state that, “It’s a natural progression. Share of wallet by offering more protection and detection capabilities to the residential and small business market is not only a good move, but one that clients desire. It takes upselling to a new level, reduces churn and ties the parties closer together."

His advice to independent dealers and integrators is to 'ride the wave'. "Get in front of it by aligning with local independent insurance, real estate brokers, and other home service trades, and develop your own combined go-to-market strategy," Kirk suggests.

For more on the situation, read "Insiders Say ADT, State Farm Deal Could Be a Boon for Industry" on SDM online.



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