Internet of Things (IoT) in Insurance

Insurance companies have a strong interest in reducing the number of claims made against a policy. The pricing of these policy is a measure of market rates, and the probability of occurrence of a certain event. IoT can provide a new layer of detail on the assets secured through policies along with richer information on the environment around these assets (people demographic, weather, behaviors etc.). This information allows for policy construction custom built around each profile.

IoT has applications in

  • Home Insurance:
    • For e.g. Home owners who have a fire alarm or a moisture sensor can get a cheaper policy
  • Car Insurance
    • Onboard Diagnostics (OBD2) devices plugged into a car’s onboard computer enable transmission of all of a car’s data e.g. location, acceleration, fuel, mileage etc. This can enable insurance companies to issue  better policies to people with good drivers (people who brake slower, turn better etc)
  • Personal / Health Insurance
    • Wearable sensors provide much richer data on a person’s life, eating habits and overall wellness
  • Deeper insight of investment portfolios
    • Big Data technology enables closer monitoring of invested portfolios allowing fund managers to discover patterns and make faster decisions on buy and sell
  • Workforce productivity
    • Insurance companies usually have a large mobile workforce. These can be tracked much better through wearable and carry-able devices. These devices connected directly to CRMs can enable increases in worker productivity and customer accuracy and updates.