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Internet of Things: Commercial Lines


 Commercial Insurance Impacts:
The impacts of IoT on commercial insurance can be as varied as the many types of businesses that purchase commercial insurance. All businesses, including insurance carriers and agents should benefit in three broad categories. These include improvement in internal operations and productivity, new opportunities for bringing value to customers and potential new business models and sources of revenue. Lets discuss how these broad categories might apply specifically to the underwriting and claims process.

Underwriting Impacts: 

Because of IoT, insurers now have more data than ever before. Leveraging this data will enable insurers to reward clients with better pricing when claims can be reduced, or even eliminated. 
As agents and brokers, the need to understand your clients risk or exposure to loss has never been greater, or more challenging. Not only does new IoT technology offer many ways to reduce exposures and provide new opportunities to improve safety and loss control, it may also introduce new risk for your client. How secure are the IoT devices used by your client and have you discussed potential cyber risk? Does your client manufacture, sell or distribute IoT devices? IoT technology is rapidly evolving and regulations concerning the protection of the data gathered by these devices is growing. A thorough understanding of your clients exposure to risk is critical.
As a consumer of commercial insurance, are there ways that I can leverage IoT devices to improve operational efficiency or reduce the exposure to risk or the possibility of a claim? Does my insurance carrier or broker offer Loss Control Services specifically designed to help maximize operational efficiency while reducing the exposure to new risk?

Claims Impacts: 

More and more consumers and businesses are using technology routinely in the normal course of a day and they expect their insurance carriers to do them same. Using technology to facilitate the claims process and make the entire process easier, as well as more efficient is good for all involved.
There is no doubt that IoT technology should reduce claims, but processing and paying claims will always be a core service provided by the carrier. How can carriers use IoT to improve the customer experience? Could sensors notify the carrier of loss directly? Technology is evolving rapidly. How can it be used to keep clients happy and increase retention of business?
As representatives of the carrier and the consumer, agents and brokers will need to understand the ramifications of self-service claims, communication issues with the appraisers, and the technology being used to service these claims. There will also be additional remote servicing technologies coming for inspection and loss control as well.
As a commercial consumer, am I utilizing all available technology to facilitate prompt and accurate claim reporting? Have I given feedback to my agent/broker and carrier about how specific technology has helped (or not helped) my organization?


Examples of IoT devices in Commercial Insurance:

  • Equipment sensors (to detect issues and remediate them, prevent losses)
  • Environmental controls and sensors (manage heat and lighting, monitor workplace safety, smoke, fire, leak detection, etc.)
  • Fleet management (where vehicles are located, telematics to monitor and improve driving behavior, monitoring of transported perishables, etc.)
  • Smart Cities, such as gas & electric utilities, water/wastewater, transportation, waste management, emergency response, building automation, traffic/infrastructure.
  • Smart Agriculture (Farming) - monitoring moisture, temperature, controlling irrigation, cold storage, automated planting/spraying/harvesting.
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