Internet of Things: Personal Lines
Personal Insurance Impacts
The impacts of IoT on personal insurance are starting to and will continue to affect how independent agents will process insurance, how consumers will purchase as well as how carriers deliver coverages. That is right I said deliver coverages, not policies. With that advancements in ride sharing, autonomous vehicles, sensors in our homes on everything from water flow to temperature and even our refrigerators and stoves, to quote Bob Dylan, times, they be a changin. So, lets look at impacts now and what we should be paying attention to.
Carriers now can gather a lot of data on potential customers as the result of IoT. By leveraging the rapidly growing additional data carriers can underwrite more effectively. Some of the additional sources are from social networking and crowdsourcing carriers can now underwrite for lifestyle. With sensing devices for both Auto and Home they can tell how you drive or what maintenance has been done on your dishwasher. With public source and authorized private information carriers can get values on property or driving records. Not many questions need to be asked of the consumer to get this information.
Agents will need to adjust their processes of collecting information and understanding what additional information will be needed in the new environment. Understanding what sensing devices an insured has may have premium, deductible or coverage impacts. Collecting social media links may also have similar impact on coverage, premium or deductible. Where this information is stored and collected will present a challenge as more of these items find their way into the process.
The consumer experience will change as well. It will be more passing permissions allowing for more personal information to be pulled instead of having to provide a lengthy interrogation. They will also be able to leverage their investments in technology to gain preferred underwriting decision.
Carriers will hope there is a reduction in claims and better underwriting results. You will see more self-directed claims on the smaller claims to expedite and reduce expenses. Technologies exist today and are being offered to allow the consumer to communicate directly with adjusters will simultaneously zooming in on specific areas and measuring all at once. There have also been efforts to reduce the Catastrophic cost lift from demand surge on much used supplies during rebuilds, all provided by IoT.
There should not be a great deal of change for agents on claims. One thing that will be easier and should be recommended is home inventory pictures/videos. Since these can now be easily stored in the cloud there is little chance of losing them in a catastrophic event. Agents need to be more aggressive is encouraging your consumer to get it done.
The consumer will notice a distinct improvement in the claim process. With the ability to process their own small claims and have them paid quicker. Catastrophic events are also being handle quicker and more efficiently as a result of the inventory build-up and access to more information.
So, what does this all really mean? A quick example to illustrate:
A couple is looking for new insurance, everything looks pretty good until a speeding ticket shows up on Moms license. The carriers systems check that date across all their data. What they find allows them to still offer the most preferred rate. They see that the customers water flow monitor reported moisture that day.
In addition, they see a post on Moms Facebook feed that reads: Had a bad day, first our water flow sensor went off, while on my way home to check on the house my daughters school called. She had hurt her leg at recess and they feared it was broken. Change of plans and on my way to pick her up I got my very first speeding ticket. Behind every dark cloud though...my daughter only sprained her ankle and our flow shut off valve worked perfectly, we had just a little water in the laundry room.
None of this should be a surprise when thinking about where we have come from. We had phones, now we have mobile devices that connect us to a universe of data and information. The uses will continue to grow and change more quickly than it has in the past.
Home monitoring and management: Environmental controls, safety (cameras, motion sensors, smoke and water leak detectors, etc.)
- Social media monitoring: to understand lifestyle and life events.
- Self-handling claims tools: Allowing the consumer to communicate, measure and photo/video their own losses to speed up payment and repair
Sensing devices: Both on Auto and Home to reduce claims and be efficient.
- Vehicles: Navigation, sensors (both partially-, and fully-autonomous), reducing frequency & severity of accidents - however increasing repair costs in the short-term due to high repair/replacement cost of sensor technology after accidents.