How IoT could change the nature of insurance

Whilst I have limited experience of the current insurance market, I think that IoT and my experience of it, could really see how this industry could benefit from digital transformation asap. An offering that integrates IoT-based technology can change the fundamental nature of some of today’s insurance propositions from household, car, health and pet.

Here are a few applications of how insurance could be IoT'd:

#1: Sophisticated insurance offerings will be available to the mass market – the price is coming to down to make IoT devices cheaper. Home Kits could include wearables, car trackers and sensors which are plug and play. Easy to install and provided by the insurance company in partnership with the utility company.

#2: Minimize or avoid potential claims – IoT devices can not only detect an incident but also initiate an automated response to minimize the cost of a claim. How often have you had a flood at home and panicked to find the stop cock tap? An IoT home would shut if off automatically reducing excess damage. A great benefit if you are on holiday and can't do anything about it anyway.

#3: Support comprehensive coverage – group pets, cars and household into one policy which can use the 'family pooled' data. The family dog might be high risk because of epilepsy but this is outweighed by a family health scheme, tracked using wearables, which rewards the family for being healthy and not penalising them because of one high risk member. IoT can enable a big picture view to be processed.

#4: Encourage modification of risky behavior – vehicles are becoming monitored more and more by apps; tyre wear, disc brakes etc. By accurately monitoring driving, careful users could get rewarded with reduced premiums. Additionally, safe driving is encouraged and accident prevention increases as people become more incentivised to drive more safely.

#5: Make it easy to get insured – use voice controlled devices to list inventory. Even better, use a webcam to recognise objects in a room and do auto-inventory registration.

#6. Disaster Relief - sensors could be placed on a selection of trees where forest fires are prone. Abnormal recordings of heat could trigger alarms before the fires gets out of control. Households in this area would not have such high premiums as a result.

#7. Home Security - sensors in trees. Sometimes burglars are not deterred by alarms or security lights. They know how much time they have to get in and out out before the police arrive. If you could alert the police without the burglar knowing then this would potentially catch them red-handed. For example, if they climb a tree to get over the garden wall then this is abnormal data sent to the tree and can trigger a police callout without the burglar knowing. The sensors do know the difference between a cat climbing up a tree and a human or excessive wind disturbance!

Whilst some insurance companies seem to want to recruit digital people with insurance backgrounds, I think you may find that some digital folk can apply their expertise to your industry in ways you may not have considered. It's just how you choose to think about it.

I hope you enjoyed my post about an industry I know nothing about. (And yes I'd happily advise any insurer seeking to make my Top 7 IoT happen).