Writing for Insurance Networking News, Chris McMahon notes that a recent report from Celent confirms the IoT could very well change “every” link in the insurance value chain.
According to Donald Light, director of Celent’s Americas P&C insurance practice, the IoT currently comprises three interdependent components: things with networked sensors, such as automobiles, machines, buildings and people; data stores, whether they are local or in the cloud; and analytics engines.
“In an IoT infrastructure, the sensors embedded in the objects collect and transmit data regarding their internal states or environment to the stores, where they are analyzed or fed into models and then fed back to the objects or users (see diagram) offering unprecedented opportunities for insurers that embrace the technology,” McMahon explains.
“Light suggests insurers begin now to prepare to make use of the data created by these objects by identifying the parts of their book of business that have the potential for connections to IoT, and then decide how they can get there faster than the competition.”
However, Light acknowledges preparing for the influx of new data types will be a “challenge,” as the embedded sensors collect graphics and text (and potentially scientific data), which most insurers have little experience with.
“[Nevertheless], there are fire suppression systems and security systems and other safety systems getting real-time readouts… They can give the insurance company writing those policies new insights as to how they are being maintained, real time and over time, and they have that controlled feedback loop,” he adds. “They could call up that policyholder and say ‘here’s how you can get better, here’s how you can reduce your premium.’”
The full text of “Internet of Things: Changing the Insurance Value Chain” can be read on INN here.
Interested in learning more about the IoT? You can check out Atmel’s recent IoT SoMa panel on the subject here, Patrick Sullivan’s EELive! 2014 presentation and our extensive Bits & Pieces IoT article archive here.