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New IoT Opportunities for the Insurers

By CIOReview | Wednesday, June 12, 2019

FREMONT, CA: Embedded with the applied science of internet connectivity, electronics, and other hardware, IoT devices can interact among others over the internet, and can remotely be observed and controlled. IoT is the fastest and most efficient processing of data in modern business, helping in creating exciting opportunities. It can transform the way risk is managed and underwritten.

Internet of Things (IoT) is transforming business processes too, which is being used to significant effect across all industries. It can be used, as a loss prevention tool and risk management. In any event of tampering or theft, sensors in warehouses can track the movement of goods and alert risk managers. To evaluate conditions plus automatically trigger maintenance procedures, interconnected devices are being used, in manufacturing. With the change in technology, there are new risks that have to be considered and IoT changes the risk profile.

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The management risks associated with IoT requires a shift in mindset from those involved in the management and transfer of risks. Some businesses use IoT across all areas of their business and expect insurance coverage to reflect the changed quality of their risk. Insurers should examine how traditional products could respond differently and also devise new coverages to address these changing risks. The data produced by interconnected systems increases precision in underwriting risk. Underwriters don't rely on historical claims data and have access to data in real-time. IoT is capable of innovating the way risk is underwritten. This technology can provide a mass of real-time data to help the management gain insights and better handle risks on exposures. 

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Insurers should consider how the claims are adapted to reflect better the changed risk profile of clients that use IoT. The real-time data that IoT can provide has the potential to transform both the underwriting and the claims process. Using data that is contextual, predictive allows insurers to rethink the way risks for clients can be managed.

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