Unleashing the Power of the IOT in Insurance Sector
The data gathered from smart devices could overturn forecasting of the decision-making processes. In today’s big data world, where each device is producing a huge amount of data every second. There seems to be a great opportunity for IoT along with machine learning to lead today’s insurance sector. Today we’ll see the power of IoT in the insurance sector.
Health Insurance sector
There are several opportunities for health insurers with IoT-connected smart gadgets. Insurance companies can process the data captured by the health monitoring devices and other wearables for their decision making and claim operations. This processed data will act as a solid proof against the medical claim provided. This wrangled data will help the insurance companies to detect fraud claims, recommend personalized products, and create more accurate estimates. IoT gadgets will bring transparency among insurers and customers in the pricing, claims handling and risk assessment processes.
In the era of the IoT-captured, data-driven decisions in all insurance processes, customers will have enough amount of visibility behind every decision made and process outcomes.
Till now you might have understood the IoT will be providing data-driven solutions in the Health insurance sector. But you might be wondering where the data will be available to the insurance companies. For the availability of the data, insurers may ask for the permission of access to the data. The insurers can also use different techniques like the Insurers may offer monthly incentives or rewards and discounts to their customers for using and sharing data generated by their smart IoT devices like wearables, calorie count, exercise check.
This will help insurance companies to reduce claims significantly. IoT enabled smart devices can also provide the functionality to insurance companies to validate claims through the data captured by these devices.
Buildings Insurance and Mortgages
The calculation of both mortgages and buildings insurance includes several realtime factors such as availability of local transport, crime rates and distance from the airport, railway stations, main city, etc.
But the quality of the building is very difficult to assess. This type of situation applies to cities such as Tokyo, where the frequency of natural calamities like an earthquake is very high. This does not mean that the construction of tall buildings cannot get funding. IoT enabled smart sensors can play a major role in such situations. IoT sensors can constantly monitor different key parameters like vibrations, changing humidity in buildings in order to predict how the building will behave during the minor natural calamities.
Both financing and insurance companies that have access to this the historical, as well as real-time data of the IoT, enabled sensors data will analyze the data and focus their investments and policies on more resilient buildings.
Usage-based Car insurance
The capabilities of IoT smart devices have enabled a new type of car insurance known as usage-based insurance (UBI). The condition for obtaining such insurance is the installation of an IoT enabled device for monitoring the geographical location, physical condition, etc of the car.
In usage-based insurance, the final cost of car insurance depends upon the type of vehicle used, measured against time, distance, behavior, and place. The insurance companies use the captured data from the installed device to predict the future. The insurance companies can use usage-based insurance to avoid the false claim caused due to over speeding of the car. Till now the usage-based is not available in all the countries. But with the use of IoT, the UBI will have a great future.
The combination of IoT data sources, use of Blockchain to validate and authenticate data, along with machine learning and artificial intelligence models will be enabling innovative companies to collect accurate and precise data, process it through their models and insert it into their risk calculation models. In order to make accurate and data-driven decisions.
The IoT along with Machine learning models will be reshaping the future of the Smart world.
As always I used to say that “Information is wealth”, there are still many security challenges of IoT. If you are interested in knowing various security challenges in IoT. Feel free to write in comments. Till then happy reading and stay tuned with us.