Before talking about “How IoT is changing the nature of insurance” I would like to grant a brief on what IoT is. It is nothing but the interconnection via the Internet of computing devices ingrained in everyday objects, enabling them to send & receive data. The Internet is transitioning from controlling information to controlling physical things, which has intellectual implications for both the global economy & the future of insurance. It is predicted that there will be up to 200 billion everyday objects connected to the Internet by 2020. Applications for the Internet of Things are as distinct as consumer devices, health monitoring, manufacturing sensors, office automation, and connected vehicles & all the way to fully smart cities.
Now you have got a concept about what IoT is. Modern IoT is changing the nature of global insurance. Here various ways in which IoT will specify today’s mainstream insurance offering:
Several Ways Insurance Offering will be Specified by IoT
#1: Sophisticated insurance providing will be available to the mass market:
While the technology supporting ‘IoT-like’ insurance offerings have been available for a no of years, the use of these has been limited to very high-value assets, vehicles or properties. With the growing ubiquity & functionality of sensors & the falling unit costs, IoT technology will allow insurers to provide highly sophisticated insurance offerings, formerly only beneficial within small high-value niches, to a mass market.
#2: Support comprehensive coverage:
During the specific type of sensors may vary, the basic IoT data capture & transmission infrastructure can be handling across vehicles, property, & wearables. As well as driving efficiency, they provide the possibility of integrating various areas of coverage, such as auto, life, property & pet insurance, into a comprehensive offering, rather than various discrete policies. But insurers must ensure they invest in the appropriate adjustable back-end systems so that this data can be combining, analyzed & new value gleaned.
#3: Avoid potential claims or Minimize:
IoT devices can not only find an incident but also introduce a programmed response to minimize the cost of a case. For example, sensors that find a property flood caused by a device failure or pipe rush can be circuited to IoT-based actuators that will shut off water & electricity supplies to minimize any harm, even if the house owner is not present. IoT can also be used to pre-emptively avoid the need for a claim wholly. Sensors could find abnormal temperature or voltage levels in machinery used by a little business to provide advanced warning of a future failure & thus avoid impressive breaks in production, spoiled raw materials, or valuable equipment repairs.
#4: Enable accurate usage & risk-based charging:
IoT-based offerings will also confess carriers to provide true usage & risk-based insurance, with the premium rates being modified grant to the risk posed at any point in time. For example, auto insurance would be charged at a high-quality rate when driving late at night, in winter, on country roads, but would be decreased when driving during daylight hrs on a major highway, &reduced yet joined when the car is parked & locked in a garage. In addition, a driver’s different behavior can be taken into account to derive an accurate danger score.
#5: Provide a platform for innovative new service substances:
With various policyholders perceiving mainstream personal insurance providing as identical commodity products, IoT technologies can supply a platform for the development of ingenious services that can minimize the use of policyholder time, improve data capture accuracy, & raise customer satisfaction, especially in areas such as claims submission. Examples of such services could consider the use of voice-controlled interaction to perform verbal inventories, & the use of webcams to assess coverage with or simplify case submissions.
#6: Encourage modification of danger behaviour:
If an insurer incorporates feedback to policyholders as part of an IoT-based providing, there is a great scope to influence or modify possibly risky behavior to the benefit of both the customer & carrier. There are already many examples of apps that provide feedback on driving habits, & there is growing information that these do reduce the poor driving behavior. Other e.g. include using IoT technology to monitor tire & brake pad wear & beaming policyholders to renew these before they compact safety. Thus, apps that monitor activity levels or calorie intake can help life insurance policyholders maintain a healthier lifestyle.