The IoT enabled future of insurance

The efficiencies that can be gained by leveraging IoT are huge and using devices that can collect data which is current and, use real-time information in ways that are more meaningful and actionable.

With IoT come the common hurdles of identification and consumption of relevant data, diverse technologies, untrained executives, privacy and security concerns. Trudging through these murky problems is the key to formulating a digitized environment.

Capability of today’s technology
Insurance agencies in the automobile sector have quickly capitalized on the easy availability and integration of sensors for vehicles and framed solutions integrating IoT systems to ensure driver safety as well as to monitor risky car behavior. Tentative steps have been taken in creating innovative solutions for home and health insurance. Property & Casualty insurance industries are confident in the direction IoT is heading, and intend to fully utilize its capabilities by 2025. Home and automobile IoT solutions will encounter complicated regulatory constraints whereas health insurance presents the issue of user privacy. Architecture involving integration of data storage, analysis, presentation, maintenance and operational costs has yet to be satisfactorily implemented. With affordable sensors for homes and cars still in the making, these services are encumbered by today’s technology.

Internet of user or Internet of ecosystem
The Roland Berger analysis report says that insurance companies are least expected to come up with IoT technologies. Companies that do create these technologies will monetize this data to supplementary parties. Thus insurance companies will have to buy user data from these dominant ecosystems. Those companies that are unable to maintain relations with the dominant ecosystems will be left behind. An alternative scenario to this would be enactment of privacy laws empowering the user, giving them control of their data. With such a system, insurance companies can ask the user directly to send the requisite amount of data in batches to be analyzed, and not access the data through an intermediary.

Interdependencies with IoT innovators
Cost of installation of technology in cars and homes, and privacy concerns in the medical sector are the main reasons keeping insurance agencies, from investing in IoT. Since the probability of these technologies being created by insurance sector is low, leasing them from 3rd party businesses will be the solution. If this is done then monetization of this data from the 3rd party will renew privacy concerns. User empowered IoT systems where users have their personal cloud storage may be the solution to such problems. Premium rates and other benefits will be decided by the level of transparency between the user and insurance company.

The benefits of successful IoT integration in the insurance industry are developing customizable policies, knowledge and control of risky behavior, detection and countermeasures for disasters, claims reductions and healthy relationships with customers. Disadvantages are reduced premiums and the possibility of driverless cars. It is time for insurance companies to partner with innovators of IoT devices and services. The future is not as far as we think it is.
#future #Insurance #BlessingorCurse #tech2016