We’ve covered quite a lot of ground over the past four weeks in these blogs on how the Internet of Things (IoT) is transforming our world, and how the insurance industry stands to gain from applying the lessons learned by other business leaders in adopting the IoT for growth.
Today we’ll wrap things up by taking a closer look at where the IoT is headed and the techniques that insurers can adopt to not only keep pace with the changes, but anticipate what’s coming.
Intelligent products are advancing all the time. In the 1970s, bar codes were state-of-the-art when it came to product intelligence. Today, billions of people carry smartphones that have significantly greater processing power than the early computer centers.
In the future, intelligent products will:
- Initiate tasks and communicate with other equipment;
- Tailor their user interfaces, recommendations and movements to meet customer preferences;
- Strengthen their features—and the benefits they provide customers—through software improvements;
- Learn how to lower their operating costs;
- Optimize their yield and productivity;
- Prevent accidents and failures during operation;
- Take action in uncertain or adverse conditions.
For insurers, probably the greatest potential to benefit from the IoT is to expand their role beyond simply compensation for losses to the development of customer-focused offerings, such as proactive education, risk monitoring, loss prevention, and remediation after a loss.
Accenture has identified seven steps that executives from any business can take in moving forward to exploiting intelligent technologies:
- Think boldly about value. Begin piloting a variety of new services that benefit key stakeholders. For example, vehicle telematics that focuses exclusively on better risk assessment and pricing, and ignores the potential for offering context-relevant value-added services, is overlooking much of its transformative potential.
- Think about tomorrow’s partner ecosystem. Example: the partnering taking place between farm equipment, fertilizer and seed companies, weather services, insurers, and the suppliers needed to provide IT, telecom, sensors, analytics, and other products and services.
- Start now to design and develop your platform. Investigate the pros and cons of new technologies; develop the architecture and frameworks to accommodate sensor networks, industrial analytics and an ecosystem of intelligent machine applications.
- Closely study the financials. Consider in advance what financial models to use to evaluate return on investment, and how to manage the cost of developing and launching new services.
- Sell your sales channel on promoting new digital products and services. Assess whether your agents and/or broker network have the right incentives and training to support your growth strategy.
- Clarify legal rights, obligations and secure access to information about your installed base. The use of personal information to deliver highly relevant insurance-related products and services has serious privacy implications. Consider what data governance and protections you must establish to deliver these new digital services.
- Put people at the center of executing your strategy. Think about how to augment your workforce with smart systems. For example, much of the contestation – and work – that accompanies an auto damage claim can be easily resolved by reviewing the information stored by an on-board telematics recorder.
Most importantly, remember that amidst all the change coming through the IoT, one thing remains the same: insurance customers are demanding products and services that deliver more value than the majority of those available today. To meet this demand, carriers must make the necessary changes. The time to push is now!
What has your business done in recognition of the IoT? Please contact me and let’s share ideas! And follow me on Twitter @JohnMCusano to stay up to date on the latest research!
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