By Dominick Rodrigues
Mumbai : The insurance industry is expected to experience another 10x productivity change between 2015 and 2025 – thanks to the IoT (Internet of Things), which represents an exciting emerging market for insurers in its huge opportunity for innovative players. Over the years, insurance providers have invested significantly in new age technologies such as Big Data, IoT, AI, chatbots etc. states Neelesh Kripalani, Sr. VP & Head – Center of Excellence, Clover Infotech.
He said that through its disruptive capabilities, Internet of Things has also played a transformational role across industries and 2020 has made it imperative for enterprises of all sizes to explore and harness the potential of IoT from a business perspective.
“For insurance providers, the adoption of IoT presents an opportunity to gain a competitive edge. For example, if an insurer takes advantage of an IoT program, it would enable them to offer customers discounts based on that customer’s actual habits and real-time data, rather than determining the premium based on the customer’s past history.”
IoT is being leveraged by various insurance providers in many ways. “Health insurance agents have started providing customers with free fitness trackers to enhance the visibility and monitor their activities. The wearable/ fitness devices provide valuable data that can be leveraged to adjust rates more fairly and profitably, and help customers prevent injuries and diseases,” Kripalani said.
“Auto insurers have been the leading adopters of Usage-Based insurance (UBI) model wherein they use smart devices/solutions to gather metrics (such as data about speed, distance, turning and braking patterns, time of day etc.) from the policy holders and leverage it to correctly price their products which benefits both the customer as well as the insurer.”
“Home and property insurance providers are inducing customers to install connected devices that warn of potential danger (fire, flood, robbery). They also use drones to assess damages after an incident has occurred.”
“Today’s customers want fast results and use technology while expecting insurance providers to do the same. So insurance claims that take several days or weeks to process can be really discouraging,” he said adding “IoT allows insurers to process quicker, efficiently and make powerful data-driven decisions, avoiding cumbersome paperwork processes. Connected devices like biometric and environmental sensors make it easy to calculate risk and adjust policies as situations change.”
“The numerous ways in which IoT can benefit insurance providers include: Assessing risks more precisely by using IoT sensors; Mitigating/preventing loss based on the data gathered by the devices; Business efficiency being increased as it works quicker and makes powerful data-driven decisions; Generate additional revenue through cross-selling by means of improved customer interaction; Reduce costs by increasing efficiency and optimizing resources; Provide usage-based insurance leading to enhanced customer satisfaction; Improving customer experience by improving engagement,” he said.
However, implementation of IoT isn’t a cakewalk. “Thus, insurers looking to leverage IoT should invest in establishing an enterprise data management strategy which encompasses necessary tools, technologies, and frameworks for securing and managing the data as a core asset. Conducting periodic training programs for all the concerned stakeholders on how to avoid breaches can help bring the cultural shift necessary for ensuring the security of the data,” he added.
