Technology is pushing 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 transmitting, collecting, and sharing data. The software within these applications analyzes and sends data to cloud servers and large databases. Those platforms analyze the data in order to pull out important data.
The most popular IoT applications involve vehicles connected with telematics, smart home devices, and wearable devices like smartwatches. IoT data is sent back to users through these devices or a connected website. These user analytics have become immensely useful to insurance professionals.
Source: The Digital Insurer
Insurance professionals can use the data from IoT devices to improve the understanding of risks. Previously, insurers had to identify the risk of loss for an asset using proxy data, such as administering a survey to customers. But as Purple Slate states, IoT allows insurers access to real-time, individual, and observable data on an asset’s potential loss
Insurers can connect with consumers by adding touchpoints in areas such as acquisitions and claims. By collecting this data from a number of different sources, companies will be able to gain a more complete picture of their customers.
This data can also assist with increased precision in assessing risk and pricing policies, meaning that brokers have the opportunity to provide more personalized offerings to customers. Not only does this mean more targeted policies, but brokers can offer specific discounts based on an insured'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 states that IoT could help insurers cut the cost of the claims process by 30% and also lower premiums for consumers. The multiple use cases for the technology have already begun to make it an asset to professionals in the industry.
New insurtech products are being released nearly every day. New technology may be overwhelming for traditional companies to keep up with, but IoT is one to keep an eye on. Here are some benefits insurance professionals can expect when implementing IoT devices:
No matter which line you sell, there's an IoT use case for your business. These applications can help you improve the insurance customer journey, create highly, proficient teams, and more. Here are some use cases to consider:
The cutting-edge technology powering insurtech startups can be intimidating to traditional companies. But implementing IoT applications can give stalwart organizations a competitive edge against newer companies. Consumers appreciate the speed and efficiency of insurtech companies. They can find that with traditional insurance companies that use IoT devices.
Expect IoT to become commonplace in the industry in the coming years. A recent ACORD survey polled insurance professionals about their outlook on the industry over the next 20 years. Nearly 50% of respondents said that they anticipate that their greatest long-term source of competitive advantage will be how they leverage technological capabilities.
Digital transformation may be a buzzy topic in the industry right now, but that doesn't mean your team needs to implement all trending software and technology at once. Start small and slowly begin to introduce new pieces of technology to your employees. Once you feel comfortable, work your way up to IoT. It may be a slow process, but you'll feel the benefits for years to come.
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