IoT Insurance Market Sees Rapid Growth

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IoT Insurance Market Sees Rapid Growth

Growth of the IoT insurance sector in parallel with innovative insurance models and growing usage of IoT to reduce the premium and risk-related costs are some of the major factors driving the studied market adoption in recent years.

Reportlinker.com announces the release of the report IoT Insurance Market – Growth, Trends, COVID-19 Impact, and Forecasts (2021 – 2026).
The growing adoption of digital technologies across various end-user industries and advancements in devices or sensors for collecting data further expand the studied market growth over the forecast period.
According to an Insurance industry report, 20% of the insurance companies were either piloting, testing, or deploying IoT initiatives. A combination of multiple technologies enabler drives this increasing adoption of IoT in the insurance.
According to the study conducted by UK-based insurance market Lloyd’s, IoT will bring various advantages to the insurance industry, such as avoiding preventable losses, better risk understanding, capturing patterns and behaviors, fraud detection, and enabling proactive monitoring.
According to Forbes, IoT can benefit insurance companies by reducing the cost of the claims process by 30%, whereas IoT-enabled devices can decrease premiums by 25%.

IoT has the power do not just transform in the insurer’s top line, but also the bottom line. Once permitted by the policyholder, insurers can live to raise the data and alerts from IoT devices to deliver services with minimizing touchpoints. The growing trend of connected devices across various industries is mainly enabling insurance companies to have greater control over data, thereby mitigating fraud. IoT implementation will also help to enhance efficiencies of systems, improve protection mechanisms, and reduce claims, leading to cost efficiency. The number of devices used per customer had increased significantly, denoting rating higher acceptability in the ecosystem.
With smart grids envisioned to globally take over the entire energy industry, the IoT utilities are expected to gain traction over the forecast period. 5G is likely to bring advancements and further expand the scope of IoT- enabled solutions in the sector. Many industry experts also claim that the vehicle telematics is leading the 5G in IoT insurance application. The rising commercialization of 5G will allow the collection of more granular data in real-time about the performance and health of the vehicle and the drivers’ behavior and enable the delivery of more sophisticated pricing plans for insurance companies. For instance, Harman launched the 5G -ready car telematics solution.
The recent COVID-19 outbreak and the nationwide lockdown have impacted many industries worldwide; however, insurance is once such sector that has witnessed a significant surge in demand, especially in health and related segments. Due to COVID-19, many industries have increased their investment in IoT solutions, especially healthcare, which further expands the studied market scope. With expanding the reach of IoT enabled insurance services during coronavirus pandemic, it is expected that usage-based insurance (UBI) will only continue to grow. According to the EFMA, 38% of insurers capture data from real-time (IoT) devices, and only 33% mine data via natural language processing-based support systems like chatbots.
However, with COVID-19, insurers face new challenges that call for a measured, practical, and informed approach. Therefore, the industry needs to upgrade, as companies will need technology more than ever to sustain their business in the post-COVID-19 era. Insurers will need to consider establishing cross-functional, emergency decision-making teams to coordinate the organization’s response, set new safety protocols, and assure quicker action as conditions continue to evolve. To enhance their IoT offering, insurers will need to deploy technologies like AI, Machine Learning, Robotic Process Automation, Augmented Reality, Telematics, Social Media, and Drones.

Author: Tim Cole
Image Credit: Pixabay

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