IoT and mobile data set to reshape insurance – something retailers need to learn from
Insurance is boring, but essential – it is also one of the industries where big data from mobile and other sensors is set to revolutionise how it works and the products it offers: something all retailers could learn from.
The ability to monitor, collect and analyse unprecedented volumes of real-time data from internet-connected sensors will allow the insurance industry to offer highly personalised policies and make far more accurate calculations of risk, according to industry analysts at Beecham Research
in a new ‘Internet of Insurance Sector Report
By building up an accurate and detailed picture of behaviour, insurance companies will be able to offer precisely-customised products and services to deliver better value for money and increase customer retention.
In addition to improved customer targeting, insurers will also be able to verify claims more reliably and rapidly, armed with a greater wealth of data, saving time and costs while delivering a better service. The open nature of the IoT will also enable non-sensitive data stored in different systems to become exchangeable and interchangeable. This will support better understanding and decision making around assurance, by using data to identify and pre-empt risks to reduce the probability or severity of a claim.
“Insurers are placing increased emphasis on customer relationship management and crafting more personalised policies rather than those simply based on pooling historical knowledge,” says Olena Kaplan, Senior Analyst at Beecham Research. “It’s no secret that customer retention is a significant challenge for the insurance industry and we believe the personalisation of policies will go a long way to solving this for companies that embrace IoT technology.”
But Beecham Research also warns that all sensor-derived data must be safeguarded from compromise, theft, corruption or loss. Insurers must not only abide by Data Protection Legislation, but also ensure that customers understand how their data will be used and secured.
“As the IoT grows, so will the risk of exposure to breaches, unless preventive measures are taken,” says Kaplan. “The insurance industry is already on the brink of major changes driven by big data and the IoT adds a further exciting dimension in digitisation that will cause an overhaul of the insurance business.”
Beecham Research has produced its Internet of Insurance Sector Brief in parallel to the 2nd Annual Internet of Insurance EMEA Conference at Wooten House, Surrey on 5-6 April 2017. Beecham Research is the knowledge partner for the event that will bring together IoT visionaries with speakers from the likes of BNP Paribas, Lloyds Banking Group, Zurich and LV.