Innovation and insurance are not usually thought to go hand in hand. However, IoT Data is quickly changing that. With it insurers are equipped to offer more relevant packages based on actual use and behavior – rather than averaged statistics. The powerful impact of Data provided by the Internet of Things is exactly why insurance providers have been among the first to adopt fitness tracking wearable technology.
Wearables offer a data driven way to understand consumer lifestyle and health habits. Consumers benefit from the system too. By sharing healthy living data with an insurer and meeting weekly fitness benchmarks, users can earn perks like free movie tickets and free coffee. The marriage of data with insurance in the context of wearables, is proving to be a win-win situation for both the provider and consumer.
Beyond personal health, Internet of Things Data offers a much bigger opportunity for insurers. In the context of a home for example, using live Data insurers would be able to understand and reward safe behavior like setting the alarm system or installing flood detection sensors. With new types of home data, insurance policies could become more based on real time habits, rather than benchmarks and industry weighted standards.
InsurTech Industry Overview
According to startupbootcamp research , the term “Insurance Technology” covers the following major verticals:
- Customer Engagement: CRM, Policy Aggregators, Multi-channel engagement, Digital claims processing, Online purchasing and document management
- Regulation & The Law: Digital contracts, KYC Identity verification, Automated compliance management
- Wealth Management: Algorithm asset management, Digital pension and retirement planning
- Data & Analytics, Real time risk management, Pay per use coverage, Dynamic underwriting, Personalized premiums
- Information Security: Claims fraud detection, Cyber insurance, Personal data storage
- Health and Wellness: Wearables, Genetic Data, Chronic condition management, Preventative health care
- Internet of Things: Vehicle telematics, Environmental sensors, Provenance/asset tracking, Home security
One of the forces driving the dinosaur insurance industry to heavily invest in innovation technology are consumers themselves. The needs of today’s consumers are pressuring insurers to provide Social, Mobile, Cloud and Analytic based services (SMAC).
- S = Social
- M = smart devices, sensor technology, wearable tech
- A= big data and analytics
- C = cloud computing
Because consumer demand for SMAC services is already in place and providers don’t want to risk being left behind the competition – the InsurTech revolution is happening quickly. Some even say the InsurTech revolution is happening much quicker than others, such as Fintech for example. This is mainly because nobody wants to get left behind the competition.
InsureTech Start-ups that are Disrupting
Where an industry is being disrupted, a new influx of startups are not far behind. That means we’re likely to see a lot more insurance tech start-ups emerging in the next few years. Not without good reason; insurance is a 3.5 trillion dollar industry which has investing hundreds of millions in tech start-ups over recent years.
Insurance Tech Startups are not the norm as of yet — but they are certainly on the rise. From wearables, to lightbulbs that act as alarm systems, big data and personalisation – over the last few weeks we’ve gotten a small glimpse at what’s in store for the future of insurance. Participating in Startupbootcamp’s first ever InsurTech accelerator alongside 18 other Insurance Tech Startups, we were exposed to the latest technologies that are going to shape the insurance industry. We spent 4 grueling days at the bootcamp refining the Domotz InsurTech idea based on IoT and Data & Analytics.
We are eager to announce that we’ve made Startupbootcamp ‘s first ever InsurTech accelerator as a top 10 finalist. That means from January 2016 we’ll work with the Startupbootcamp mentors and Insurance Partners in London to refine our IoT offer for Insurance. In case you are curious, our insurance offer is based on real-time, sensor-sourced customer data and analytics for household and commercial property insurers.