Times are changing and so is the insurance industry. In order for your business to stay on top of the competition, you need to stay on top of the changes in the industry.
So how is the Internet of Things (IoT) affecting insurance and how could IoT affect insurance in the future?
What is IoT insurance?
Internet of Things (IoT) refers to a system of interrelated computing devices with the ability to transfer data over a network without any human-to-computer or human interaction.
Put more simply, it refers to a number “things” that connect to the internet to transfer data with other connected devices.
This technology can be applied to many “things” such as objects, to animals, machines and environment sensors. Connected devices are objects and devices like smartwatches, tracking chips, or smart home technology that adjusts the temperature, can monitor for leaks and monitor for faults.
How IoT affects insurance
Presently, and in the future, the Internet of Things brings a few changes and paves the way to evolve the insurance industry. Most notably, IoT has made the task of insurance claims a faster process.
For example, a client being able to capture a picture and upload it immediately to file for a claim. This reduces the time required for someone to asses the paperwork and report the damage.
Let’s have a look at more ways IoT might affect insurance in the future…
It’s important to note how these advances in technology can affect insurance.
- Improved customer experience
A major factor of business in the insurance industry is customer experience. With so many options of insurance companies and premiums on offer, having a good reputation can set you above your competitors.
In other words, it’s a good idea to implement new technology where you can to show your customers you are evolving and taking necessary actions to progress and improve customer experience.
- Faster claims
Customers use technology every day and expect most businesses to use it as well. IoT (Internet of Things) makes the policy claim procedure a faster and more efficient process by allowing customers to submit data and pictures through an app for faster processing time.
Faster claims are exactly what customers want for the future. The quicker and more accurate it can be, the better!
- Lower risk
IoT has the capability of gathering data which can help lower common risks. For example, connected devices in a smart home are capable of detecting possible leaks or hazards in the home, reducing the risk and further possible damage.
The future of vehicles and vehicle insurance might be less about the car model and rather about the smart technology installed. IoT in connected vehicles refers to self-driving cars, built-in Wi-Fi, and GPS systems. These can alert drivers of speed, temperature, fault codes, to fill the tank, change the battery and more! These safety alerts can make for a safer future of driving.
- Cyber risks
There is, of course, a risk with transferring large amounts of data all the time. Customers and insurers worry about cyberattacks and fraud. Especially with customer’s personal data.
Insurers will have to invest in advanced IoT data security and fraud protection to protect their customers and their data from cyber risks.
- New competitors
One complication of the future of insurance is a new competition. This new competition is IoT-focused companies such as home security companies, auto manufacturers, and big digital companies.
- Data management
With big amounts of data constantly being transferred, insurance companies might have to get help in the form of a data management strategy. Though this isn’t exactly a negative effect, it’s an extra responsibility for insurers to consider and invest in.
There is also the question of who the data belongs to – does it belong to the insurer or the client?
There is a lot to take into consideration regarding the evolution of the insurance industry. New technology can pave the way of how insurance claims will be settled, and how premiums could be personalized. How IoT might affect insurance in the future cannot be predicted as technology cannot be predicted.
The best step forward is to evolve with the industry and new technology. Make decisions that’ll maximize business and customer experience.