"In an industry as regulated as insurance, taking advantage of new IOT technology is one way companies can stand out and offer a forward-thinking approach to their customers. It’s definitely time for change in insurance, and that change is coming through the IOT."
Blake Morgan Forbes May 16 2018
Sensors deliver an ever increasing width and depth of information which insurers can utilise to help prevent and mitigate loss and damage. The IoT is the means by which such data can be surfaced, analysed and used to automate processes and augment human cognition.
Blake highlights the potential benefits :-
- Cut the costs of claims processing by as much as 30%
- Lower some premiums by as much as 25%
There are well documented challenges to face e.g. lack of standards and inter-operability, security etc. Insurers must ensure they are entitled to use data for the use case they desire e.g. using fitness tracker device data to validate sickness claims.
As insurance moves more towards prevention rather than cure harnessing such data through the IOT will be a potential differentiator. BUT only if part of an overall business and technology strategy.
Too often, insurtechs and technology writers focus on just one technology as it is is a panacea whereas in reality they need to combined with technology platforms, innovations and micro-services as a holistic solution. AI and Blockchain come to mind for example.
Look for technology partners that already harness IOT data in digital platforms and communications/orchestration hubs.
Aside from improving the customer experience, using the IOT also helps insurers cut costs. Automation can cut the cost of the claims process by as much as 30%. In many cases, those savings can be passed on to customers. IOT-connected devices have helped some insurance companies lower their premiums by as much as 25%.