By Brynne Ramella, Content Marketing Manager, ProNavigator —
Technology is driving the insurance industry forward.
One such advancement is the Internet of Things (IoT). As NAIC says, IoT refers to a network of Internet-connected devices that transmit, collect, and share data. Software within these applications analyzes and sends data to cloud servers and large databases. Those platforms analyze the data to extract important data.
The most popular IoT applications involve connected vehicles with telematics, smart home devices, and wearable devices like smartwatches. IoT data is returned to users through these devices or a connected website. These user reviews have become immensely useful for insurance professionals.
How has IoT transformed the insurance industry?
Fountain: The digital insurer
Insurance professionals can use data from IoT devices to improve understanding of risk. Previously, insurers had to identify the risk of loss to an asset using proxy data, such as administering a customer survey. But as Purple Slate claims, IoT allows insurers access to real-time, individual and observable data about the potential loss of an asset
Insurers can connect with consumers by adding touchpoints in areas like acquisitions and claims. By collecting this data from several different sources, companies will be able to get a more complete picture of their customers.
This data can also help with greater accuracy in risk assessment and pricing policies, which means brokers have the opportunity to offer more personalized offers to clients. This not only means more targeted policies, but brokers can offer specific discounts based on a policyholder’s usage data.
Advances in technology always come with increased risk. IoT devices present new opportunities for cybersecurity threats and claims fraud. But the benefits outweigh the risks. For example, NAIC claims that IoT could help insurers reduce the cost of the claims process by 30% and also reduce premiums for consumers. The multiple use cases for the technology have already begun to make it an asset to industry professionals.
Benefits of IoT in Insurance
New insurtech products are released almost every day. New technology can be overwhelming for traditional businesses to keep up with, but IoT is something to keep an eye on. Here are some benefits insurance professionals can expect when deploying IoT devices:
- IoT data can be used to design policies that better fit an insured’s lifestyle.
- Businesses Using IoT Can Expect Reduced Costs: AWS Reports IoT in Insurance saves businesses $9-$15 billion each year.
- This technology can be used to better assess and prevent risk, thanks to alerts from IoT data that warn when and why damage may occur.
- Employees will no longer need to visit hazardous sites in person to assess potential damage or loss.
- Take advantage of IoT analytics to stop cybersecurity fraud.
- Provide better and more frequent customer service through telematics on IoT devices.
Five use cases for IoT in the insurance industry
No matter what line you sell, there is an IoT use case for your business. These applications can help you improve the insurance customer journey, create highly competent teams and more. here are some use cases to consider:
- smart houses — Internet-powered home devices such as smart doorbells, smoke detectors, and security systems are rapidly gaining popularity. Insurers would benefit from gaining access to data from these devices, as that information can help prevent accidents and allow insurance professionals to better serve customers. For example, smart doorbells can help identify a burglary before it happens, keeping a policyholder’s home safe from disaster.
- connected cars — Telematics is now being used to connect cars to IoT applications, which is a useful asset for auto insurance companies. Routes, speed, acceleration, seatbelt detection and more than one driver can now be tracked in real time. That allows insurers to measure how safe a driver’s journey is, provide predictive maintenance, and reduce fraudulent claims.
- Improved healthcare systems — Smart watches and bracelets can access the user’s sleep quality, heart rate, blood sugar, and more. These devices sometimes gamify exercise, which will encourage the user to lead a healthier lifestyle. Health insurance companies can use this data to customize policies and offer savings to customers with a healthier lifestyle.
- A more connected construction industry — Securing the construction industry is a challenge. Job sites are often dangerous places, and multiple areas of the industry have different products. IoT devices can help keep construction workers a little safer on the job. For one thing, sensors embedded in a home’s infrastructure can detect smoke, mold, and carbon dioxide and then adjust conditions to prevent a damaging event. Workers can also put on a wearable device that could provide a warning if they approach a dangerous location.
- Improved subscription process — IoT devices have significantly sped up the subscription process. Insurers can now build a better customer base, analyze risks upfront, reduce losses, and improve overall policyholder interactions. A faster underwriting process can help streamline other departments within insurance companies.
How IoT will change the future of the insurance industry
The cutting-edge technology that powers insurtech startups can be intimidating for traditional companies. But deploying IoT applications can give established organizations a competitive advantage over newer companies. Consumers appreciate the speed and efficiency of insurtech companies. They can find that with traditional insurance companies using IoT devices.
Expect IoT to become commonplace in the industry in the next few years. TO recent ACORD survey surveyed insurance professionals on their outlook for the industry over the next 20 years. Nearly 50% of those surveyed said they anticipate their biggest source of long-term competitive advantage will be how they leverage technology capabilities.
digital transformation It may be a hot topic in the industry right now, but that doesn’t mean your team should implement all the hot software and technology at once. Start small and gradually start introducing new pieces of technology to your employees. Once you’re comfortable, move on to IoT. It may be a slow process, but you will feel the benefits for years to come.
To learn more about building your company’s technology stack, go to to the ProNavigator blog for the latest ideas!
About ProNavigator
ProNavigator provides a knowledge sharing platform, Ask Sage, used by some of the largest insurance organizations in North America to save time, provide superior service, and realize revenue opportunities. The platform leverages the latest advances in artificial intelligence and natural language understanding to instantly, automatically, and accurately retrieve answers to employee questions. For more information please visit pronavigator.ai.
SOURCE: ProNavigator