5 fascinating ways the Internet of Things will change insurance forever

 

The insurance industry is on the cusp of dramatic change. You know how you can tell?

Look at your wrist.

There’s a pretty good chance you’re wearing a FitBit, Apple Watch or other digital wearable. If you’re not, someone you know is. These days, they’re as common as a smartphone, and just as popular. And they are all collecting massive amounts of personal health data that can inform both user and, if permission is given, anyone else they wish, including their insurance company.

Wearables are not the only connected device consumers and companies are embracing. Sensors monitor the performance of both personal and commercial vehicles. Homeowners are equipping homes with smart tech that controls HVAC and electrical systems, as well as monitors for both weather and human threats.

These connected devices are completely changing the way some insurers develop new products and communicate with customers. And experts say those insurers taking a ‘wait and see’ approach will be left in the cold.

“Such a posture is no longer viable,” reads EY’s The Internet of Things in insurance. “Early adopters have established a clear and compelling value proposition by demonstrating how data from in-home and automotive sensors, wearable technology, drones, GPS, mobile and telematics devices, networked appliances and multiple other sources can help grow new business, improve risk assessment and proactively engage policyholders in loss prevention.”

Everything’s changing

In other words, the Internet of Things isn’t a trend. It isn’t a thing that will pass in the night.

Need more proof? Here are five fascinating ways the IoT is changing everything:

1. Bye-bye traditional life!

John Hancock, one of the oldest U.S. life insurance companies, announced in September 2018 that it will stop underwriting traditional life insurance and instead sell only interactive policies that track fitness and health data through wearable devices and smartphones. It first introduced the interactive life policy in 2015.

The interactivity comes through data shared by policyholders through wearable health trackers. John Hancock gamifies the process by rewarding insureds with gift cards and premium discounts when they hit predetermined exercise targets. The goals are to teach healthy lifestyle habits and to extended premiums and reduce claims.

2. Tracking more than fitness

Some wearables can relay real-time information to assist in claims processing, capturing video, pictures, or audio to document property damage or take statements from witnesses.

Data from fitness trackers may even help ensure clinical interpretation is correct or, in some instances, replace it. In one Canadian personal injury claim, Fitbit data was ruled admissible and helped show how the claimant’s activity levels declined after the injury, reported Joseph Bracken in Insurance Innovation Journal. The court may also use wearable data to discredit fraudulent claims as well.

3. Smart bulb? A bright idea

An approximate 100 million light bulbs will be connected to the internet by 2020, which is up from 2.4 million in 2013. Smart bulb users can control lights through a smart phone app, allowing them to remotely dim lights, change colors, and help regulate sleep.

There are even bulbs that turn off as a homeowner pulls out of the driveway and turn on when he arrives. The feature works through geofencing and provides a certain level of safety, lighting both the exterior and interior before the driver steps out of the car, reducing the chance an accident or incident may occur.

4. Smart savings at home

Smart home telematics can capture images, video and other information, then deliver that data to the insurer, where it can move into an automated claims processing workflow, expediting claims processing and controlling fraud.

One vendor, Roost, provides home telematics solutions to insurers, including sensors that connect to fire detectors and can alert home owners and insurers to water leaks and freezing temps.

“Home telematics solutions are not going to prevent an incident like a fire or a water leak from happening, but they can certainly help mitigate a situation and reduce it from something that might result in total loss, which is devastating for homeowners and very expensive for insurers, to a much smaller and more manageable incident,” Peeters told Insurance Business.

5. Helping out when needed

Smart home owners that opt in and share home telematics with their insurer might receive alerts, tips and tricks, and product offers tied to real-time information. An insurer might even offer to send a repair person to contain a situation before it can cause too much damage, saving time and money for both the homeowner and insurance company.

A platform for change

Insurers moving toward this new connected insurance experience need a technology foundation to help manage data and ensure success. OnBase content services platform from Hyland integrated with the Duck Creek Platform provides insurers with a property and casualty engine built for the new open world.

Together, the two solutions help insurers:

  • Extend the core
  • Simplify information access and control
  • Keep information secure
  • Reduce IT expense
  • Speed development of new products and processes

To learn more about how OnBase and Duck Creek can help you transform your insurance business, download A Platform for Change: Duck Creek and OnBase.

Cara McFarlane

Cara McFarlane

Cara McFarlane is the global solution marketing manager for Hyland’s insurance vertical. Her mission is to effectively position Hyland as the leading content services platform within the insurance market by sharing best practices that accelerate insurers’ digital strategy across their enterprise . Cara leverages her 19 years’ experience in the content and process automation software industry to help lead Hyland’s insurance market vision and roadmap. She received a bachelor’s degree from the University of Northern Iowa.

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