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The insurance industry has always been in the limelight for several positive as well as negative reasons. With true innovation and revolution very rare in the insurance sector, many of the big and developing insurance companies are often seen talking about bringing reforms in this field. So far we have witnessed the reforms and changes brought by the Internet of Things technology across our homes, workplaces, roads and water management systems, however, a little-known fact is that technology can be further used for revolutionizing the insurance industry as well.
Internet of Things for tackling risks in Insurance Industry
Both known as well as unknown risks are the part and parcel of the insurance industry and with the ability of the Internet of Things technology to use sensors and minute communication devices makes the accessing of granular data easier as well as quicker. Telematics devices are often the very first IoT- related experience that every insurer comes across. These telematics devices make use of thousands of minute sensors which help in better connectivity and are often used in large bridges and buildings for detecting all kinds of potential risk and structural defects Telematics-based insurance is also growing in popularity.
Another typical example of the Internet of Things technology reforming the insurance industry is the monitoring of health information of the insurers by the insurance companies. This is done in compliance with wearable gadgets such as the FitBit band, etc. which helps these insurance companies in keeping a track of the health of all insured individuals.
However, the context of insurance does not simply stop there. Insurance companies that offer agricultural insurance are often seen making use of these tiny sensors and IoT- inspired devices for keeping a track of livestock, a practice which helps them in calculating the rate as well as price of agricultural insurance accurately and effectively. These sensors are usually implanted into the animals for tracking and identifying their health and number from time to time.
Insurance of the Future with IoT
We have already seen at large the positive effects of IoT across our homes and offices, connecting our entire life together in a huge connected cloud. So how exactly will the Internet of Things technology reform the insurance industry?
To begin with, the kind of self- connecting ecosystem that IoT will create in the insurance industry will bring positive effects on all the processes involved, such as better consumer involvement, process optimization as well as preventive care in case of mishaps. With the sensors and ever- efficient gadgets making their way into the field of insurance, insurers will be able to connect the dots as well as mitigate risks much before they reach a threshold level. Internet of Things also makes sure that there is better product development, underwriting, sales, deliveries, distribution as well as claims and services being offered to the insurers exactly as claimed by the insurance companies. In simple words, we can say that the Internet of Things technology will make the concept of insurance and risk management simple and quick for all customers.
Impact of Internet of Things on Insurance Industry
Connected healthcare Insurance: There has been a considerable increase in global longevity along with the occurrence of lifestyle illnesses and ailments, which in turn has put the model of traditional healthcare service to shame. Today, there is an ever- increasing need for advanced healthcare services and better insurance methods for ensuring faster health as well as monetary arrangements of all insurers. In a world where insurance companies and insurers go hand in hand, there are chances for better health tracking as well as risk management.
Connected commuting Insurance: With the automobile industry adopting the concept of Internet of Things by large, it is needless to say that there are increased provisions for improvement in the automobile and commutation arena. This is the reason why several of the insurance companies have now started to invest in driving behaviour analytics as well as automobile performance. This will assist them in keeping track of not only the automobile; rather all related driver’s data as well. Now, these tiny yet crucial pieces of information is required by the insurance companies as well as the manufacturers of vehicles for differentiating product experience as well as for advanced risk settlement and segmentation.
Actionable Insights of Internet of Things in Insurance Industry
What will be more interesting to see as well as experience will be the insurance companies talking about actionable insights, such as the ability to pick up all required data directly from your connected devices? This collected data will further enable insurers to identify and track patterns as well as trends based on the behaviour of the insurer.
With the help of IoT, insurance companies will gain better access to all real- time data; hence enabling them to analyse all new information while also connecting it with all the historical information. This, in turn, is a great way of making effective predictions and developing great preventive measures, practices which define the insurance industry most appropriately.