Insurers are lagging behind the times, says exec

The industry must be able to evolve in a more interconnected world via IoT

Technology

By Gabriel Olano

While the insurance industry is typically slow to adapt to the changes technology brings to society, the Internet of Things (IoT) presents a good opportunity for innovation, according to Mihkel Mandre, head of product development at Swedbank Insurance.
 
“Generally, insurance is quite a conservative industry and not so innovative. But, the Internet of Things is a really good opportunity to help the industry move forward,” said Mandre.
 
To gauge the attitude of the industry towards IoT, research house FC Business Intelligence conducted a survey of 300 insurance executives. When asked what type of insurance will receive the biggest impact from IoT in the future, 52.7% of respondents said that general insurance would be the most affected. Health and commercial had similar numbers at 22.1% and 19.9%, respectively. But despite the media attention around supposedly life-prolonging health-related wearables, only 5.3% of respondents were of the opinion that the IoT would significantly impact life insurance.
 
When asked where IoT would have the greatest value, nearly a quarter (24.7%) of insurers answered customer ‘behavior steering’, or improving customers’ risk profiles by discouraging risky behavior, leading to fewer claims. One thing to note, though, according to James Brown, head of product at ProtectYourBubble, is that IoT must make the user’s complicated life easy, not the other way around.
 
Other top answers from respondents were risk-based pricing (22.1%) and the creation of value-added services (19.8%). Only 4.9% believed that IoT’s greatest value lies in fraud detection.
 
The study also reveals that 35.4% of executives have placed IoT in their top five priorities, but only 6.2% say it’s the number one priority. Echoing the insurance industry’s conservative stance, 17.7% said that IoT was not important to their business. Even more telling was that only 3.4% have completed their adoption of IoT and believe that the industry is already embracing the change.
 
Most of the results presented echoed Mandre’s insight that the insurance industry is lagging behind the times. With devices such as smartwatches, GPS systems, and self-driving cars fast becoming a fixture in the general public’s life and changing the way they live, it’s high time insurers follow suit in order to get a better picture of their clients’ needs and how to serve them better.
 
 

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