How IoT is transforming the insurance industry
Insurance companies are managing risk with the IoT
At the 2018 “Digital Future of Insurance” conference (Dig|In), the focus was on technologies, trends, business models, and case studies that are redefining the industry and creating new opportunities across property, casualty, auto, and life markets.
We were struck by the pace of change happening within the ranks of risk-managers historically described as sluggish to embrace digital transformation. The diversity of innovators we saw rolling up their sleeves in Austin included carriers, agents, brokers, fintech / insurtech start-ups, tech providers, analytics firms, investors, consultants, and researchers.
Nathan Golia, Conference Chair and Editor-in-Chief, Digital Insurance, kicked off the gathering, a three-day focus on trending topics like big data, customer experience (CX), artificial/augmented intelligence (AI), machine learning, and Internet of Things (IoT).
Aggregated behavioral data, usage-based premium calculations, predictive analytics, and other risk-management insights are disrupting traditional revenue streams and opening up new frontiersShare this quote
Eye in the sky
Ken Rosen, EVP and chief claims officer at Allstate, might as well have been looking at the drone dangling from our booth when he titled his keynote, “The sky’s the limit: the future of catastrophe response.”
IoT solutions of every shape and size are being used to streamline field operations, predictively calculate risk, improve customer engagement, keep pace with compliance, and boost competitive advantage. Drones alone are being deployed to assist with rooftop damage claims, to measure difficult-to-access property, and to assess wildfire and other risk to people and property.
While promising new data streams are exciting, the greater challenge (and opportunity) lies hidden within the terabytes. Aggregated behavioral data, usage-based premium calculations, predictive analytics, and other risk-management insights are disrupting traditional revenue streams and opening up new frontiers. Entrepreneurs and investors seemed especially eager to capitalize on:
- Insuring millennials
- Creating and launching new direct-to-consumer products
- Chatbots and consumers
- AI and the insurance consumer journey
One of the most popular illustrations of revenue-shifting digital disruption was telematics / usage-based-insurance. IoT sensor technology, like these vehicle solutions from AT&T, can help insurers collect detailed driver data using smart in-vehicle devices that have the ability to recommend behavior-based premiums, discourage texting-while-driving, reduce fraud, and provide geofencing capabilities.
Data analyzed can include drive time, vehicle location, and speed, and can be utilized to reduce churn, reward safe driving, and restructure risk models for greater efficiency. Many of the conversations at Dig|In underscored the level of interest surrounding IoT and telematics right now:
- Insuring self-driving cars
- Autonomous transportation: roadblocks ahead
- Your car says there’s been an accident: claims and IoT
- Telematics, sensors, and their impact on consumer behavior
- IoT: Making our roads safer
- The future of IoT and insurance
Protecting every IoT endpoint
It’s no secret that the potential for cyber-attacks has increased alongside the digital transformation. As operations and data move to the cloud, protecting current assets while remaining future-flexible has become a top priority for insurers, as these sessions highlighted:
- The new world of insurance: AI, drones, and cyber attacks
- Insurers on the cybersecurity frontline
- How to effectively underwrite and manage the cyber insurance in the digital world
- Using drones and AI to unlock real property attributes
Our team appreciated the insights we gained from this year’s case studies, demos, prototypes, and thought leadership from customers and peers who are accelerating digitization across the insurance ecosystem. We look forward to our next firsthand collaboration with industry leaders about priority technologies and services that will result in a more connected, more protected future.
AT&T is a leading provider of integrated solutions for business, powered by a global network that secures more connections than any other communications company in North America. To learn more about digital transformation in the industry, visit our Financial Services solutions page.