5 Insurance Internet of Things Hurdles
April 1, 2016 3:41 AM
Smart home devices offer an opportunity for insurers to get more data and have a deeper connection with their insureds, but the nascent technology still presents challenges. Thats the finding of Aite Groups The Smart Home: Opportunities for Insurers report, written by Gwenn Bezard. Aite lists more than a dozen challenges under several headers; weve identified some of the most relevant to insurance CIOs.
Technology Risk
When insurers select a smart device partner, they tie their reputation to that companys customer experience. Consumers may not be too happy with as technology ages or proves buggier than expected, or as unfortunate security and privacy mishaps make the news, Aite writes. Its great to be associated with technology when it shines, but not so great when it falters.
Interoperability
There are still battles between standards sets, like Wi-Fi vs. Bluetooth for device communications, or Apples HomeKit vs. Googles Brillio for device framework. Further, what exists is far from mature, Aite says, and device manufacturers dont always stick to the standards when they say they do. Multiple standards must be embraced across the IoT stack, Aite says. Some vendors are not interested in trying to integrate with other device manufactures and are sticking to developing a stand-alone product or their own ecosystem.
Data sharing limits
Insurers cant just force vendors to share their data, Aite warns: Vendors are increasingly selective in what they share, making it difficult for insurers to build services on top of whatever data device-makers are willing to share. Device manufacturers, retailers, cable companies, telcos, and home-security firms have limited appetite to unsettle their customers with one more consent form, just to please insurers.
Agent buy-in
Getting agents to push smart devices is likely to go as well as getting them to push usage-based insurance, Bezard says -- which is to say, difficult. Insurers have been forced to go direct to promote telematics insurance, Aite writes. Its unclear whether insurers could fare better with their agents in the home insurance market.
Aftermarket issues
Getting value from smart devices involved a long chain of cooperative partners to insurers and not everyone has the best track record. Device manufacturers have limited aftermarket support expertise. Cable and telco companies have spotty customer service track records. Home-security firms have their fair share of irate customers. Large tech firms like Apple may have their Genius Bar but are not particularly known for coming to your home to fix things, Aite writes. For insurers, there are simply not many obvious partners with a stellar customer service track record they can lean against.