The Two Biggest IoT Challenges for Insurers
FC Business Intelligence asked 300 carriers which challenge impedes Internet of Things (IoT) adoption for insurers most. The top two answers were:
Lack of a clear strategy – 40.7%
Privacy issues – 14.5%
Lack of a Clear Strategy
In terms of formulating a clear strategy, insurers will have to quickly decide whether they will attempt to develop and install their own devices on insured properties/assets, or partner with established technology vendors and service providers. The latter is more likely, which means insurers will need to develop a deep understanding of IoT’s complicated ecosystem to forge the best possible partnerships and coalitions.
Insurers would be wise to consult with a trusted advisor who possesses both a deep understanding of the insurance industry and an up-to-date grasp of the latest IoT technologies.
Within their IoT ecosystem, insurers will require a platform or system that enables them to seamlessly connect with partners and end users. Insurers must also be able to apply advanced analytics to the constantly flowing streams of IoT data, so they can obtain actionable insights.
The privacy concerns for insurers entering the IoT space are multi-faceted. One of the first questions is: who really owns the data that is generated? Deciding who is primarily responsible – the device-maker, the service provider that transmits the data or the company receiving the data – will help resolve privacy/data security issues.
Hackers will of course be trying hard to get their hands on the treasure troves of data generated by IoT. Consumers will want strong assurances that their private data, particularly the health data generated by wearables, is secure.
This quickly-evolving space will probably soon become regulated by various governments, potentially further complicating privacy issues (and triggering penalties for those who over-step). And what about insurance customers who simply won’t agree to grant access to their personal information?
Thankfully for insurers, this type of customer is a distinct minority. According to Accenture, 78 percent of insurance customers are willing to share personal information with their insurers in exchange for benefits, such as lower premiums or faster claims settlements.
Want to learn more about IoT’s effect on insurers? Please stay tuned for related upcoming blog posts, an IoT infographic and eBook…