Insurance, Innovation and IoT – FC Business Intelligence Report

Article Synopsis :

The emerging ecosystem of connected devices presents a huge opportunity for insurers looking to become more relevant to digital-native customers.

Insurance technology is moving rapidly beyond the keyboard…

The report “Insurance, Innovation and I-o-T”, by FC Business Intelligence, explains how the web of connected devices will transform the relatively static insurance industry and looks at ways insurers can integrate I-o-T into their business and operating models. The report shares research and key findings from various sources on the growing impact of I-o-T on insurance:

• 20% of insurance companies are currently piloting, testing or deploying an I-o-T project. The number rises to 50% over a three-year period.
• Property insurance companies are increasingly using drones to assess damages after an incident has occurred. Drones hold the potential to make insurance adjusters’ workflow 40% to 50% more efficient.
• By 2020, over 50 million US drivers will have tried usage-based insurance models that rely on I-o-T devices.
• Roughly 30% of the auto market is expected to involve telematics for the majority of policy interaction and pricing by 2025.
• Also by 2025, half of U.S. homes are expected to be connected through I-o-T devices for monitoring and system control.
• 80% of respondents to an Intel survey would be willing to share their health data anonymously to reduce health care costs.

The common inclination with new data sources and I-o-T is to use them as tools to lower premiums and provide discounts, which, of course, means less revenue for insurers. The report discusses five areas where the cost-risk-opportunity matrix is particularly dicey for insurers:

• Handling the Data Flood
• New Product Options
• Maintaining Brand Value
• Meeting the Skills Gap
• Security and Cyber Risks

The report articulates the top-five expected benefits of I-o-T adoption realized by insurers moving sooner rather than later:

• Potential to reduce severity and frequency of claims
• Better risk assessment
• Service and satisfaction improvements
• Growth in cybersecurity markets
• The omni-channel insurer

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