Internet of Things Already Impacting Insurers
The “Internet of Things” (IoT) is already having an impact on the insurance industry, as more insurers launch pilot projects and experiment with embedded sensors and smart devices that go far beyond telematics.
A recent advisory from the research and advisory firm Novarica provides a snapshot of the current state and near future of IoT, citing recent initiatives from about 20 by insurers, such as Allstate Canada, Hartford Steam Boiler, State Farm and United Services Automobile Association.
As intelligent devices are become more widespread and affordable, insurance companies are finding new and innovative ways to use IoT devices for data collection, customer and agent interaction and pricing.
“The use of intelligent monitoring and data gathering made possible by the evolution of IoT will ultimately impact numerous insurance processes,” said Mitch Wein, vice president of research and consulting at Novarica.
“At some point in time the entire value chain including product, underwriting, pricing, risk assessment, service and claims handling will all be impacted by IoT,” Wein noted. “As these technologies evolve, there will be a reduction in cost to policyholders and insurers. Insurers should be actively monitoring the potential of IoT and considering how their core systems and processes will handle this additional wealth of data.”