The Internet of Things (IoT) is a network of interconnecting devices, such as intelligent vehicles and smart watches, that exchange data. The IoT is going to have a major impact upon insurers and this article looks at what could be laying ahead for them.
By 2025 there are predicted to be 30 billion connected devices globally, with a typical family of four having more than 100 on their person and around the house. An individual will have access to more information about themselves than ever. They will know about their wellbeing, how safely they drive, the status of their house and their shopping habits. More knowledge means increased consumer expectations.
Changes are afoot already, telemetrics, advanced driver assistance systems and smart homes are just some of the connected devices that are providing insurance companies with more data and enabling them to provide usage based insurance.
There are sizable opportunities in the insurance market. The greater access to data will enable businesses to understanding their customers better. They have the opportunity to get involved in their client’s connected eco system of data to combine health, driving and home insurance. Consumers will also become more aware and concerned about their privacy and data protection. The demand for cyber insurance, to allay consumer concerns, will increase and offer new market opportunities.
Insurance firms could also find themselves becoming white label suppliers to corporations who embed insurance into their products. BMW and Allianz already offer usage based insurance for the car manufacturer’s i3 and i8 electric vehicles. Samsung acquired SmartThings, an open platform for smart homes. Both organisations could extend their product offerings to include prevention and restitution.
The wealth of data available to insurance companies will also enable them to diversify their services to include prevention. The data from many customers will enable firms to develop a greater understanding of the individual. This data can enable insurance companies to provide prevention services to educate customers so they make informed decisions to maintain the value of their assets.
In order to thrive and take advantage of the IoT; insurance firms must act now. Finding success with the IoT will require changes in structure, culture and finding different ways of doing business. With emerging technology around every corner, firms that have agile business processes will be able to work with customers, their devices and their data. Insurance companies have the opportunity to partner with other IoT innovators to ingrain their services into customers’ lives and make a beneficial difference.