IoT devices have become part of our daily home and work life. The insurers who are not only collecting the IoT data, but are actively using it to improve products, and create new business models, will drastically see a competitive edge over those who are not taking advantage of this knowledge.
Did you know by 2020:
- There will be 30 billion connected devices
- $1.5 million average increase in operating income for digitally transformed enterprises
- 10% of the data on earth will come from IoT
- $10 billion market for business process automation tools by 2020
In a recent survey of companies and IoT development, there are:
- 64 of companies surveyed are currently developing strategies in IoT
- 27% of the companies surveyed are currently piloting IoT
- 21% of the companies have deployed an IoT product
And when companies were asked if they were planning on spending money on IoT’s:
- 76% of the companies surveyed are currently allocating some spending towards to IoT
- 14% of the companies surveyed are currently allocating significant spending towards IoT
The Good, the Bad and The Ugly Good of IoT’s
The Good. IoT data helps companies be more efficient, make better informed decisions, and can help create new business. Ford Motor Company is using IoT devices like Nest to stay competitive by equipping a car with sensors to pick up body heat of the driver. If the driver is warm, a message is sent to Nest, a smart thermostat, to cool down the home just before the person gets there.
The Bad. Lack of standards, expensive, and environmental concerns are a few of the bad things we have seen with IoT. The IoT standards goal is to develop a cross-industry technology that can be used by all IoT. Instead, different IoT standards are competing against each other. IoT is expensive – if you want smart you’ll have to pay more. The environment will be a growing concern because of the amounts of small devices that come with IoT and e-waste will grow with the need for IoT.
The Ugly. When your data is breached, your digital world has come ugly. With the appearance of IoT comes DDoS. DDoS is short for Distributed Denial of Service. DDoS can attack any device that uses the internet to transmit data. DDoS attacks can create significant business risks with lasting effects. It is very important for IT and security administrators to understand the risks associated with DDoS attacks.
Benefits of IoT in the Insurance Industry
Insurers are seeing the importance of IoT devices and are using them to help their business models. Some insurers offer drivers a device to monitor their daily driving performance. By doing this, the insurer can price more accurately on one’s driving abilities instead of the traditional way of quoting a policy by age and the car model. These devices are becoming game changers in the insurance industry and especially when it comes to claims adjusting.
Recently Microsoft’s Jonathan Silverman and I gave a presentation on IoT and Real Applications for Insurers Today which explained why insurers must find ways to develop new flexible products around the connected world and provide real applications for consumers today.
Here are some examples of IoT in action:
- Connected insurance
- Insurance companies use IoT to collect data on their policyholders and their driving habits. Insurance rates are based on the habits and not by the age or make of a car.
- Amazon’s Echo can turn your house into Smart Home. The Echo or other smart home devices can provide many benefits such as an alert to you or the fire department if the house is on fire, or even tell you when your insurance bill is due.
- Doctors can even monitor a patient while at home with the use of compression shirts. These shirts have sensors to monitor the vital signs of a patient and alert the doctor if something is out of the ordinary.
- Claims prevention
- Watch the video to the right to see how ThyssenKrupp partnered with Microsoft Azure to connect their elevators to the cloud, gathering data from their sensors and systems, and transforming that data into valuable business intelligence. By doing this ThyssenKrupp could predict and preform preemptive maintenance. ThyssenKrupp – Giving cities a lift with the Internet of Things
- Closing Claims Faster
- Microsoft HoloLens could change the game for auto insurance claims. It will make claims close faster when claims adjusters use the Hololens at an auto accident site and see the damage caused through a virtual recreation of the accident. Volvo Cars: Partner Spotlight With Microsoft HoloLen
- Hazard Insurance
- Earthquakes are one of the most feared natural disasters because they come without warning. Companies are creating early warning systems using IoT by detecting movement close to the earthquake epicenter and transmitting warning alerts to users further away. With these alerts, people can take cover in safe areas, reducing injuries and loss of life.
- Other extreme weather can be unpredictable. Tornadoes can touch down with little notice and quick, heavy rain can quickly lead to floods. In the winter months, ice on the roads can be deadly. IoT censors and detect potential dangers, giving more time for people to find shelter or stay alert to road hazards.
Technology is constantly evolving and IoT products are changing the world we live in today. Smart insurers are investing more into IoT and BI technology to not only collect data but use it to help predict and prevent claims. With lower risk, less claims, or a faster claim to close process, it is a win-win for the insurers and the insureds.