Internet of Things and insurance – Roland Berger Report

Article Synopsis :

Roland Berger’s report, “Internet of Things and insurance“, summarises the view of 23 leading European insurers who took part in the ‘IoT Insurance Think Tank’ conducted between November 2014 and February 2015.

Connected-cars, connected-homes, connected-health. How will insurers connect with customers? 

Connected-car, connected-home, and connected-health are the three IoT vectors analysed in the report.

Changes which started with connected-cars (UBI telematics)   are slowly evolving into connected home and connected health applications. Insurers will likely be forced to assume one of two roles in the emerging IoT landscape:

1.     Build a leading IoT ecosystem

• Build an IoT ecosystem capturing data from various IoT devices
• Use data to improve insurance value propositions and monetize them to third party companies

2.     Deliver IoT linked insurance and assistance services

• Deliver IoT linked insurance and assistance services by forging partnerships with platform owners (or participating in platform owners data marketplaces)

The report suggests insurers will not likely build dominant IoT ecosystems, as requirements such as real-time data collection, wireless connectivity and analytics are the domain of technology companies like Google and Apple, giving them a significant advantage.  Tech players will likely monetize IoT data in one of three ways, all posing a threat to traditional insurers:

• Sell data to insurers
• Distribute insurance
• Become an insurer

Other important findings of the report are:

• 60% of European top insurers have launched connected car solutions, but almost none has entered the smart home or health space
• The case for connected car insurance solutions is currently more obvious than for home and health applications
• Italy and the UK are the most advanced countries in terms of connected car insurance solutions
• Connected car is perceived as the first IoT segment to grow, pushed by car manufacturers (installing devices as standard equipment in new vehicles)
• Insurers are likely to get intermediated access to IoT data – a regulatory change could help prevent this trend
• The “dominant ecosystems” scenario is seen as the most likely – but with a wide variety of opinions
• New regulation, social trends and private initiatives could foster a radical shift in the way citizens control their personal data
• Specific capabilities will be required to succeed in each IoT scenario

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