Information from "things" will help carriers offer new lines of business. ...The Internet of Things is cited as potentially the most significant technology trend this decade.

1. 70 BEST’S REV
Technology
Years after coining the term “Internet
of Things,” the person who came up
with the phrase wished he had instead
called it the “Internet for Things.”
Although only a slight variance, the
nuance of something being “for” instead
of just “of” is becoming more meaningful
each day.
The Internet of Things is cited
as potentially the most significant
technology trend this decade, a very
powerful statement given the impact of
cloud.The validity of this claim is based
upon the role of the Internet of Things
as a driver of innovative change, more
so than the cloud, which is primarily an
enabler.
The Internet of Things has been
linked to specific industries, primarily
discrete and process manufacturing,
where actual products are made. Other
verticals using these products, such as
life sciences and health care, also stand
to benefit.While the insurance industry
does not require the application
of physical products, business
opportunities for insurers will extend and expand in
verticals most impacted by the Internet of Things.
More than other financial services businesses,
insurance carriers depend on information for
not only increased profits but also for their very
existence.The more information available from
“things,” whether automobiles, bicycles, heating or
cooling systems, or from the production systems
themselves, the more viable it will become for
insurers to offer new property and casualty lines of
business.Within these new lines, and even within
existing lines, new coverages will emerge, enabled
by the data made available from the Internet of
Things coupled with predictive analytics.
Within the property/casualty sector, the most
widely recognized Internet of Things application
today is usage-based insurance (UBI).
Utilized in the auto insurance industry,
UBI applications are numerous in
expanding coverage options (e.g.
safe drivers) and also in creating
opportunities for new lines of business,
such as senior driver-specific products.
Despite misperceptions of the risk
associated with insuring senior drivers,
early applications of UBI indicate that, if
segmented appropriately, senior driver
insurance products can actually be
profitably low risk.
The disruptive nature of the
Internet of Things to insurers has been
noticeable in Progressive’s “Name Your
Price” campaign, but the Internet of
Things further expands the horizon
of potential disruptions. For example,
the UK’s Insure The Box Ltd. provides
policies tied to mileage driven during
the policy term.While its website
touts savings to clients (roughly $720
annually), what stands out most is this
web-based statement,“We’ve called
more than 45,000 of our customers to
help them after an accident.”
Not limited to innovation in the property/
casualty sector, the Internet of Things continues
to play an increasing role in the life and health
sectors. Along with readily visible innovation
such as the Apple Watch and Fitbit and their
“battle of the fitness smartwatches,” traditionally
more staid insurers are embracing the benefits
of the Internet of Things.A great example is John
Hancock Insurance’s emerging premium discount
program offered to term and universal life insureds
in exchange for allowing the company to track the
insureds’ healthy habits with a swipe of a gym card
or a smartphone app.
If the insurance industry is, as John Hancock
Insurance President Michael Doughty says,“crying
out for innovation and for someone to try to reinvent
the product to make it more relevant,”then the
Internet of Things is the tool for that someone. BR
By
Gates
Ouimette
The Internet of
Things is cited
as potentially the
most significant
technology trend
this decade.
Insight
Internet for Things?
Information from ‘things’ will help carriers offer new lines of business.
Best’s Review columnist Gates Ouimette is founder and principal of
ITconnecter. He can be reached at gateso@ITconnecter.com