IoT Insurance Industry Trends: Growth, Challenges, and Future Forecast

July 21, 2020

IoT in insurance appeared a couple of years ago only but has already shown outstanding results.

Along with facilitated business operations, the tools of the Internet of Things help insurance companies partner faster, work cheaper, and expand their activity more effectively.

But let’s see whether the involvement of wearables, sensors, and connected tools can keep improving the insurance sector after the COVID-19 changed the world.

IoT in Insurance: Use Cases of How the Modern Industry Works

The insurance sector is demonstrating dramatic development. Being generally innovative, insurers gain the most of their current benefits with the involvement of IoT.

In a recent couple of years, all the trustable observers honored the achievements of IoT in insurance. For example, according to McKinsey, the appearance of the digital ecosystem enabled partnering between insurers and outside companies to provide cross-industry service.

Insurance Use cases

The most illustrative use case is the cooperation model under Google Nest for creating the smart house service. In its turn, Deloitte noted the enhanced approach to segmenting customer base and refining pricing models. In particular, the emergence of online rate comparison capabilities is the beneficial consequence of IoT in insurance.

All these trends call digital connectivity to develop even faster and innovate further.

IoT in Life Insurance

One of the top solutions in the sphere of life insurance is mobility/connected cars. This tool enables tracking all the vehicle’s key parameters and its driver behavior — including the intensity of using brakes, the favorable parking places, and the typical driving time.

As a result, the customer gains timely recommendations on preventing the harm of their high-risk actions and increasing driving comfort.

IoT in Health Insurance

In terms of health insurance, IoT introduced smart health. Once incorporated in the smart home ecosystem, it significantly assists people with disabilities, for example, to manage their daily activities.

IoT Insurance Industry Trends 2020

For other population categories, the achievements of connected health help maintain their healthy state and prevent possible diseases.

IoT Insurance Industry Trends: New Opportunities

Introducing IoT into the insurance sector creates several opportunities.

First, it promises enhanced risk management. With better access to analytical data on driver behavior, it increases the predictability of vehicle use. In addition, customers can enjoy the customized service that accurately fits their needs.

The second perspective is the ability to offer a full-stack type of service. By linking with various outside partners, insurance companies become ready to involve the cross-industry approach to their data-based offering of new services.

Finally, the expansion of IoT technologies creates an environment of better control over finances. This means reducing costs on unnecessary offers and maximizing profits from concentrating on delivering the service people actually want.

2 Key Challenges for IoT Trends in Insurance

On the one hand, the advantages of IoT trends are still hard to achieve in developing countries. Precisely, the immaturity of the insurance market creates chaos in interactions between its key actors. Moreover, the regulation void and widespread illegal driving cause inaccurate predictions on market behavior.

Insurance Challenges

On the other hand, there exist some technical limitations for IoT insurance development from country to country. Mostly, you can’t reach your partner once you and your vehicle leave the homeland. This causes difficulties in expanding IoT insurance trends.

How COVID-19 Affected the Sphere of IoT Insurance

Generally, the Coronavirus pandemic has increased the importance of safety in all the meanings of this word. It refers to the danger of keeping people close in terms of physical distance combined with the intensified use of digital tools, which increases the risk of fraud and vulnerability of business operations.

At the same time, the lockdown caused by COVID-19 left people with their houses and cars alone. And so, they had time to think about enhancing these basic facilities. Surprisingly, this situation attracted the attention of the wide public to IoT insurance technologies.

Future of IoT in Insurance: What Enterprises Can Request from Insurance Companies These Days

Practically, the list of opportunities and the complexity of challenges in front of IoT in insurance achievements determine future work’s direction. In particular, it’s needed to improve the technological base and expand current results abroad.

At the same time, the development of cybersecurity deserves special attention. This trend creates a new dimension in the possible risk management and is highly requested after the reluctant shifting of most of the transactions and business processes online.

Where to Try IoT Tools in the Insurance Industry?

If you’re interested in introducing IoT insurance trends, refer to Intellectsoft. Our task is to empower companies and their workforces with innovation services and approaches to help them survive during these times.

Since 2007, Intellectsoft has been developing impactful and award-winning apps for Fortune 500 companies and established brands. We delivered solutions to:

  • Eurostar
  • Jaguar Land Rover
  • Universal
  • EY
  • Guinness and other companies

Learn more about the use cases in our Case Studies section and some of our recent awards:

  1. Intellectsoft Named Top Software and App Developer in California
  2. Intellectsoft is a Global Software Development Leader, Outruns Nearly 1000 Companies

Talk to our experts today to  find out more about the topic and how your business or project can start benefiting from it!

Explore what we offer for the Insurance industry.