New insurance models emerging as a result of technology adoption

AXA tech executive explains emergence of new insurance products to maximize the use of technology

New insurance models emerging as a result of technology adoption

Technology

By Allie Sanchez

Insurers have barely caught their breath from the emergence of usage based insurance (UBI) as a result of the use of telematics in the car industry, but new business models are already emerging.

Harald Felgner, AXA Switzerland IoT architect, told Insurance Business in an email exchange that, from the company’s experience, new insurance models have come about from the increasing use of networked devices.

One of these is prevention based insurance, in which “changes offer an opportunity to increase prevention as a business model.”

Felgner explained that the company is currently undertaking two experiments in Switzerland in which it gathered data through connected devices from cars and homes.

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Specifically for car insurance, the use of the internet of things (IoT) devices, which monitor, gather and transmit data, helped the company provide, through its experimental program, as much as 20% in premium reductions.

“Our working assumption is that prevention of losses will increase, claims go down as a result, and insurance prices go down for those policyholders with reduced risks,” he explained.

Another emerging business model, he said, is connected insurance, which has applications in health insurance, which makes use of IoT devices to monitor a person’s health status, and provides products based on data gleaned from such devices.

“Those policyholders willing to subscribe (to) a connected offer…might additionally shift risk selection, at least during a period where connected insurance offers exist in parallel to non-connected classical offers,” he added. 


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