Connecting the Internet of Things to the Commercial Insurance Landscape
As a new white paper from Insurance Nexus points out The Internet of Things, or IoT as it is more commonly referred to, is no longer the very frontier of computer science as far as consumer-focused products are concerned.
Peruse any general insurance focused insurance trade publication and there will be an article on wearable fitness monitors and in-vehicle telematics services, which are now commonplace in Europe and the U.S. Taking their application into the insurance sector has been a growing trend over the past few years, particularly in Europe.
There is a good reason why IoT has been adopted more in personal lines much faster than the commercial space. The scale required to fit a telematics box to a car, for example, and consumer society lends itself to such devices but it could be argued that IoT appears to have more potential in the London market than in personal lines.
For so-called “big ticket” commercial underwriters in Lloyd’s and the London bureau the risks are higher, there are potentially hundreds of millions of dollars at stake, not $100.
More technology innovators are now looking at claims prevention as a commercial insurance IoT opportunity. Claims take up a huge amount – 80% it has been estimated – of an insurer’s book of business, which is where they spend most of their money. The biggest target for claims adjusters and the senior insurance leadership teams they are part of is the potential to improve the customer experience, including first notification of loss, which is a major challenge from a data and machine learning perspective as well as from a regulatory point of view.