Insurers have several concerns when it comes to selecting an Internet of Things provider, according to Dawn Mortimer, assistant vice president IoT/Telematics Claims Product Management for Verisk Insurance Solutions. Insurers also need to consider the challenges associated with offering an IoT experience, such as the platform used, the adoption and customer engagement strategy and determining what data to leverage.
“Having worked at a provider myself rolling out these types of solution, it was really difficult,” Mortimer said.
Since there are several IoT providers, insurers must decide and identify who to partner with – a startup versus a well-established tech company – for wearables, connected cars, connected homes and buildings, she said.
“There’s just a dynamic opportunity where insurance companies are wanting to partner with IoT partners, but who are the right ones that they should develop those relationships with and offer solutions to their customers,” Mortimer said.
There are many different challenges the insurance industry faces when adopting IoT, said Mortimer. These include determining the platform used, the customer engagement and adoption strategy to use for home and vehicle implementation and what data to leverage. The adoption strategy is significant because it has to target the right customers, she added, noting that installation is one of the biggest challenges insurers face. Some insurers are partnering with installation companies to ensure devices are connected properly.
Mortimer said IoT connected homes benefit insurers by mitigating losses before they become too expensive. She said the number one challenge insurers face is water damage severity and frequency.
“We know from our Xactware data, is that there were over 90,900 water incidents in the U.S. alone last year,” Mortimer said, noting that the average water damage claim event totaled about $7,734.
Both insurers and consumers have IoT-related privacy concerns. Customers want to ensure data is managed accurately. Insurers want that, too, in order to protect their customers.
“I know many insurers that are looking very deliberately and detailed, combing through the contracts, understanding that company’s capability around both security and privacy,” said Mortimer.
It’s important for insurers to understand how customer data will be used and stored.
“I think partnering with folks with who know how to manage data and know how to ask the right questions with their IoT partners is critical to the future success of ingesting IoT into the customer’s life,” Mortimer said.
Was this article valuable?
Here are more articles you may enjoy.