Insurance firm now offering discount on use of IoT alarm

Insurance firm Zurich is offering a discount on monthly insurance fees should a customer use the IoT alarm offered by Cocoon, despite security concerns over IoT devices.

Are we ready for an IoT alarm?
Are we ready for an IoT alarm?

Zurich is offering a discount on IoT alarms, further pushing the idea of a ‘smart home', but security experts have concerns over the network security of these types of devices. 

Should a consumer choose to use Cocoon's Home Security system and be insured by Zurich, they will get a discount of 10 percent off their home insurance.

Cocoon claims it's an advantage over traditional alarms by using infrasound technology – subtle, inaudible vibrations in the air caused by movement. Unlike frequencies of sound in the human range of hearing, infrasound travels doesn't degrade as quickly as it travels across rooms and multiple floors.

Because of this, the company claims one Cocoon can look after the whole home – whether it's a noisy inner-city flat or a secluded country home.

A spokesperson for the company claimed, “It's a more accessible type of home alarm which should hopefully lead to more secure homes, in comparison to the traditional home alarm systems.”

Zurich was asked whether or not there is a difference in the discount offered to traditional home alarms, but was not able to disclose any specifics due to the nature of how they work out the discounts.

Some 76 percent of Brits admit they ignore burglar alarms solutions, even though there were an estimated 743,000 incidents of domestic burglary in the year ending September 2015 (ONS Crime Survey for England and Wales).

Security expert Andrew Tierney from Pen Test Partners told SCMagazineUK.com, “Sensors using similar technology have been about in the past, but never really used for homes. It could work quite well, but would need to be able to discriminate between genuine issues and things like people slamming doors, drafts, etc.”

Almost one million homes became "smarter" during 2015 in the UK, bringing the total number of smart homes to four million. Gartner predicts that “6.4 Billion Connected ‘Things' Will Be in Use in 2016” so there is no sign of the market slowing down.

However, the nature of IoT devices means that because of their low cost, information security is often not a prime consideration in the design of the device. With manufacturers rushing to get products to market, hiring pen-testers to push the device to its security limits rarely happens.

This has meant that according to a research paper by Cisco, 73 percent of business decision makers expect the IoT to cause security threats to increase in severity over the next two years.  

Likewise a Forrester survey of organisations around the world showed that 47 percent of the industrial organisations that use or plan to use the IoT had previously experienced security breaches in their industrial applications.

Further to this, a Symantec whitepaper said, “Our analysis of 50 smart home devices painted a disturbing picture. Despite an almost constant stream of media reports of cyber-attacks and hacking incidents, there are still many devices that do not use encrypted communications or proper authentication. It is crucial that smart home devices, or any IoT devices for that matter, use mutual authentication and encryption. IoT devices often have less memory and slower CPUs, so they may be unable to use the same encryption methods as a traditional computer does, but that is no excuse for the lack of strong encryption.”

So are we ready for IOT alarms? Helen Jales, head of innovation at Zurich, told SC: “Smart devices for the house – for example, thermostats, leak detectors and security alarms – have the ability to help customers understand and manage risks to their home much more easily and quickly than ever before. Many are easy to install, allow earlier detection of a problem, and can send a notification to your mobile phone meaning that even if you are away, you will be notified of an issue.”  

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