Internet of Things (IoT) in the Insurance Industry
IoT is often regarded as the next big industrial revolution after the Internet. In addition to connecting machines with machines and with people, it is also promoting an enhanced sense of awareness of our surroundings. From coffee makers to washing machines, everything can now be connected and controlled. It doesn’t come as a surprise that spending on IOT worldwide (across all markets) is expected to rise from $737 billion in 2016 to a whopping $1.29 trillion by 2020.
Internet of Things is making its presence felt across industries, and the insurance companies are no different. IoT essentially uses its massive data flow and information from various devices to calculate and come up with possible outcomes for insurance companies and policyholders, which help them to minimize their losses, and it also actively engages the policyholders to prevent mishaps. Here is how the IoT can affect the Insurance companies and insurance policyholders.
How Internet of Things benefits Insurance policyholders
Advancement in IoT is in the best interests of the policyholders. This is because IoT keeps a track of anything and everything which is on the network, which includes the policyholder, and the assets he has insured.
1. IoT and Car Insurance
Consider a case where your car is insured at an insurance company which uses IoT to assist them with insurance policies. You can ask them and get your driving habits recorded with the IoT.
If a fluctuation is seen in the insured person’s driving, it will alert the insurance company. Also, good driving habits observed by IoT can get you good discounts on insurance policies. Hence, an increase in IoT technology can prove to be very beneficial for insurance policyholders.
2. IoT and Health Insurance
A person who cares a lot about his well-being and his fitness is obviously less prone to diseases as compared to a person with a sedentary lifestyle. However, almost every fit person and a normal person pay the same premium.
IoT can help you here. With various devices available now, like Fitbit and other running apps, which track your activities, you can contact your insurer and link your apps and devices with the IoT and get discounts on your premiums.
3. IoT and Home Insurance
As a homeowner, it is natural for a person to opt for a good home insurance policy to protect his home from damages and sudden calamities. Many a time, untoward incidents can lead to lead to losses for both policyholders as well as for insurance companies.
These things can be avoided using IoT. Devices powered by IoT can be linked with satellites and various environmental sensors which can warn insurance policyholders of a potential problem before it gets too big. It can also notify the people about a possible approaching calamity to be avoided, hence preventing too much damage.
These pointers aptly denote the immense value that IOT can have in the insurance sector. It not only segregates the right premium for the right set of policyholders but also captures essential data points that can prevent claims and payouts for the insurance companies.