June 9, 2017

How The IoT Impacts Insurance

The world economy is on the verge of a new technological revolution due to the Internet of Things (IoT). This revolution will significantly change the structure of the global economic system. In 2015 the cost of using IoT technologies in industrial facilities was $870 billion, and for consumers, it was $546 billion.

In 2016 insurance became a sector with noticeably growing investments in IoT technology. The Internet of Things increases the interdependence of industries, which stimulates the introduction of new insurance solutions to cover the risks arising from the use of technology.

 

Indian insurance company Bajaj Allianz General Insurance has launched a new program for clients. The goal is to offer incentives to safe drivers. Information is collected using an IoT device called DriveSmart. (The program is designed for drivers of passenger cars.) To operate the system, a driver needs to download the application Insurance Wallet, which connects to DriveSmart after entering the insurance policy number and other personal information.The device connects to the OBD-II diagnostic port in cars released after 2010 and sends information to Bajaj Allianz, where the user’s driving behavior is analyzed.

For sharp braking, rapid acceleration, and frequent stops, penalty points are awarded. Drivers with a safe driving style receive a discount of up to 30% off their insurance premiums.The system tracks the average mileage per day, tells the user about fuel consumption, and gives advice on safer driving. Using DriveSmart, users can determine their car’s location, retrieve diagnostic alerts, and store their driver’s license information, the valid dates of their insurance, and other information.

Insurance companies can carry out not only quantitative but also deep qualitative analysis of data on insured items. Companies will not only be able to rely on statistical data in assessing risk but also directly model possible risks. The introduction of the Internet of Things technologies will promote the development of new insurance products, services, and working methods.

Using IoT will not only lead to the formation of innovative types of insurance but will also change the model of interaction with traditional types of insurance. Many insurance companies, including those in emerging markets, have already begun to implement systems for monitoring, collecting, and processing information about their customers in order to form a detailed picture of the client.

To help the IoT providers implementing these innovations, JeraSoft has developed an agile billing, rating and mediation solution for those Internet of Things providers who develop smart things for the insurance sector.

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Source: CIO

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