{"id":739,"date":"2018-06-18T06:02:15","date_gmt":"2018-06-18T03:02:15","guid":{"rendered":"http:\/\/kusuaks7\/?p=344"},"modified":"2026-03-30T13:47:56","modified_gmt":"2026-03-30T13:47:56","slug":"insurance-industry-primed-for-big-iot-impact","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/iot\/insurance-industry-primed-for-big-iot-impact\/","title":{"rendered":"Insurance industry primed for big IoT impact"},"content":{"rendered":"\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tReady to learn Internet of Things? Browse courses<\/a>\u00a0like\u00a0Internet of Things (IoT) Training<\/a> developed by industry thought leaders and Experfy in Harvard Innovation Lab.<\/em><\/strong>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tFew industries will see as big an impact from the internet of things as the insurance sector. Indeed, IoT has the potential to touch nearly every facet of insurance, with the promises of both benefits and risks for carriers as well as their customers.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tIoT will impact how insurance underwriting and pricing are done for markets including transportation, home, life, healthcare, workers\u2019 compensation and commercial. And it will transform the way insurers gather information about customers and their environments to process claims, determine risks and calculate costs.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

Primed for growth<\/strong><\/h3>\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThe industry is primed for a big move into IoT. Recent industry research sheds some light on how insurance will be impacted by IoT. Research firm IDC, in a 2017 report that estimated global spending on IoT would grow 17% in 2017 to reach just over $800 billion and rise to nearly $1.4 trillion by 2021, said insurance would see the fastest spending growth of any industry.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tDuring this period, the sector will experience a spending increase at a compound annual growth rate (CAGR) of 20%. A more recent research report predicted even more optimistic growth of 33% CAGR and\u00a0reaching $9 billion by 2022<\/a>.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThe keys to this growth are the integration of real-time IoT data with AI-powered operational intelligence algorithms. Underwriters will no longer simply rely on actuarial data to insulate their company\u2019s book of business from unacceptable exposure. Real-time operational IoT data will allow insurance companies to proactively prevent loss, ensure contractual compliance and detect fraud.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

Tracking<\/strong> autos<\/strong><\/h3><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tFor example, in the area of auto insurance,\u00a0vehicles equipped with sensors<\/a>\u00a0will provide data back to the carriers about the driving habits of insured individuals and the condition of automobiles and parts. This will help insurers correlate safe or unsafe driving patterns with unacceptable risk of accidents and injury. Unsafe drivers can be alerted before their behavior results in a loss, and premium incentives can be provided to safe drivers.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tAutomobile insurance pricing will become personalized and dynamic, shifting from being partly based on geographical zones and a forecast of miles driven to observed driving behavior, driving distance, commute route patterns and risks associated with those routes. As an increasingly large number of vehicles are connected to the cloud, more drivers will opt for this type of real-time, usage-based coverage.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

Smart<\/strong> homes and buildings<\/strong><\/h3><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThe use of IoT technologies is beginning to transform homeowners\u2019, renters\u2019, workers\u2019 compensation, commercial and general liability insurance.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tIn the home, connected, smart smoke detectors already help alert security monitoring firms to potential risk of fire. Insurers can offer discounted premiums in exchange for access to IoT home monitoring capabilities (such as smoke and leak-detection sensors) that can reduce the risk and scope of preventable loss. The sooner the homeowner is alerted to an event, the greater the likelihood of keeping damage to a minimum. That results in fewer costly claims for insurers.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tHome security monitoring using cloud-connected video cameras and IoT perimeter sensors not only provides a sense of safety and security for the homeowner or renter, but also reduces the risk of burglary and improves the odds of recovering stolen assets.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tOf course, the use of IoT sensors to protect assets extends beyond homeowners\u2019 insurance to commercial use cases.\u00a0Smart commercial facilities<\/a>, such as office buildings, factories, stores and warehouses, will do more than just controlling lighting and building temperature. These facilities can utilize sensors to monitor valuable assets, detect fire, smoke, earthquakes and hazardous environmental conditions. When integrated with real-time worker notifications, such IoT connected sensors will be able to provide proactive alerts on a variety of dangerous conditions, protecting people as well as property from potential harm and loss. Companies that employ such technologies and are willing to share data with insurers will benefit from a safer operational environment and lower insurance premiums.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

Health<\/strong> and fitness<\/strong><\/h3><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tHealthcare insurance providers are starting to gather health and fitness data \u2014 with the permission of their customers \u2014 to offer promotional programs that encourage good health maintenance practices. The emergence of connected wearable devices that provide personal health-related telemetry promises to usher in a new era of proactive health monitoring and maintenance.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThese wearable technologies will have an impact not only on health insurance, but on disability, life and workers\u2019 compensation lines as well. Individuals, employers and carriers all stand to benefit from gaining a better understanding of health-related risks in order to improve premium pricing and reduce costs of claims.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tJust as nonsmokers receive preferentially priced health insurance premiums, active individuals may soon be able to receive such benefits. IoT devices will also be able to assist physicians with improving drug regimen compliance.\u00a0Emerging smart pills<\/a>\u00a0contain ingestible sensors that can report when the pill has actually been taken by the patient. Patients who comply with their drug regimen may be at lower risk for adverse healthcare outcomes.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

Addressing<\/strong> challenges<\/strong><\/h3><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThese are just a few examples of IoT\u2019s potential beneficial impact on the insurance industry. But these benefits are not without their challenges. For insurers, one of the biggest challenges will be ensuring robust\u00a0data security and privacy<\/a>. Highly personalized insurance will require gathering, storing, processing and analyzing personally identifiable customer information. That data must not fall into the hands of cybercriminals. The costs of such a breach can be significant, including regulatory fines, lawsuits, damaged reputation and loss of trust.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tAcquisition and analytic processing of the IoT data are additional significant challenges. Insurers will not simply be collecting and\u00a0analyzing more data<\/a>\u00a0than they ever have; they must also collect and analyze that data in near real time to insure that the operational insights generated can be used to prevent or reduce loss. Traditional insurance companies will require a major upgrade of their IT capabilities to add real-time operational intelligence to their arsenal. Such operational intelligence will require acquiring advanced skills in technology areas such as IoT networking, cybersecurity, cloud computing, big data analytics and artificial intelligence. Finally, it will take time to blend the insurance domain knowledge of traditional underwriting professionals with the knowledge of professionals who are experts in emerging IoT-related technologies.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\tThe good news is that most insurance companies are actively preparing to transform how they do business. The IoT-connected world will change the way both insurers and insured think about preventing loss and managing risk \u2014 largely for the better.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Few industries will see as big an impact from the internet of things as the insurance sector. Indeed, IoT has the potential to touch nearly every facet of insurance, with the promises of both benefits and risks for carriers as well as their customers. IoT will impact how insurance underwriting and pricing are done for markets including transportation, home, life, healthcare, workers’ compensation and commercial. And it will transform the way insurers gather information about customers and their environments to process claims, determine risks and calculate costs.<\/p>\n","protected":false},"author":204,"featured_media":3945,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[195],"tags":[93],"ppma_author":[1725],"class_list":["post-739","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-iot","tag-internet-of-things"],"authors":[{"term_id":1725,"user_id":204,"is_guest":0,"slug":"dean-hamilton","display_name":"Dean Hamilton","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g","author_category":"","user_url":"","last_name":"Hamilton","first_name":"Dean","job_title":"","description":"Dean Hamilton, an engineer, serial entrepreneur and technology executive with over 30 years of innovation experience, is General Manager of the Service Enablement Business Unit of Accelerite<\/a>. He has led successful technology innovation efforts in the areas of next-generation networking, cloud orchestration, machine-to-machine communications, internet of things and enterprise network security, in both large public companies and venture-backed start-ups."}],"_links":{"self":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/users\/204"}],"replies":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/comments?post=739"}],"version-history":[{"count":0,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/739\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media\/3945"}],"wp:attachment":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media?parent=739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/categories?post=739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/tags?post=739"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/ppma_author?post=739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}