From Demographic Profiles To Real World Data: How Insurance Companies Are Leveraging IoT
Insurance companies have traditionally relied on demographic and geographic information to assess coverage rates for customers. Loss has typically been a trailing indicator, rather than a preventative event. IoT is changing this methodology and changing it quickly.
At the Insurance IoT USA Summit, held this year in Chicago, IL, the best of insurance companies were leading, listening and learning in sessions about how IoT innovations are and will transform the industry. SpinDance was there to share our IoT experience and be part of the narrative.
IoT is generating the data necessary to offer insurance customers the most personalized coverage — and rates — possible, while also providing the technology and information for further improvement. That data, which helps drive rates down and margins up, is available to large and small carriers alike, creating the disruptive playing field that is being experienced by many other industries: adapt or die. An estimated 1,400 tech savvy insurance startups are demonstrating an awareness and readiness for the opportunity.
A few examples of IoT in insurance include:
- Usage-based auto coverage which collects data on mileage, speed, braking and turning will identify safe drivers regardless of age or gender.
- Home, office, commercial and industrial facilities are equipped with sensors to detect internal and exterior environmental conditions, with two way communications able to respond instantly to smoke, temperature, motion and other potential impacts.
- Biometrics stand to improve our quality of life and also lower our healthcare premiums by simply tracking our activity and suggesting lifestyle modifications.
Insurers need to understand their customers at a level previously unknown and begin to transform how risk and cost are avoided. Through IoT, insurers are finding key ways to meet the needs of customers such as:
- Partnering with product manufacturers to jointly deliver value to the customer
- Designing business models for ROI creation
- Identifying the right analytics to achieve the goals of abating risk, reducing claims, lowering customer costs, and raising retention and satisfaction
- Addressing issues relative to security and privacy along with customer trust and adoption
Are you an insurance provider who isn’t yet considering innovating your customer experience through IoT? It is certain the reasons for choosing one carrier over the next will be drastically different in five years, as our ability to gain better insight into customer needs becomes the ultimate selling point. Providing better service at a lower cost is ideal, and we at SpinDance would love to help you find and build your company’s IoT solutions. Get in touch!