How the Internet of Things will shake up insurance

Despite the strength and stability of US insurance, the industry stands to be tested by the IoT unless it adapts

Insurance News

By Lyle Adriano

America’s insurance industry is one of the largest of its kind in the world; while the industry remains strong and relatively updated, it could learn a thing or two from utilizing the Internet of Things (IoT). The interconnectivity and sharing power brought about by the IoT has the potential to elevate the industry to even greater heights.

In an interview with Forbes, senior vice president of Sutherland Global Services Vik Renjen detailed how the IoT could make the insurance industry more efficient and cost-effective.

Renjen believes that through the IoT, the insurance industry can adopt an “analyze and act” operating model, enhancing the way carriers interact with their policyholders and partners.

To further elaborate his point, Renjen enumerates five possible innovations the IoT could introduce to the insurance industry:
  • Geospatial applications – Auto carriers can utilize telematics to gather data from policyholders’ vehicles such as history of speed, distance, breaking and turning patterns, and so on. The data is then used to accordingly price and maintain “usage-based” insurance.
  • Environmental sensors – Homes and facilities can be equipped with sensors that detect temperature, smoke, toxic fumes, mold, tremors, and other hazards that could pose a risk to the properties. Not only will the devices be useful in warning property owners, but they can be handy for insurers who can accurately write risk based on the data gathered by the sensors.
  • Connected biometrics – Wearable tech can be used to monitor the lifestyles and health of policyholders. Those claiming disability can be accurately monitored for compliance, and the improved compliance assessment should lead to potentially lower claims cost.
  • Diagnostics – Products (such as electronics, toys, and appliances) can be fitted with diagnostic sensors. Specialty insurers can then offer extended warranty protection on such products, and can even offer predictive/preventative services should the sensors detect something wrong.
  • Carrier process transformation – The carriers themselves will have to adapt to the IoT, securing more hardware to harness the power of interconnectivity. Insurers will also need analysts who can make sense of the data they collect through the IoT.

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