In a recent Accenture survey of insurance executives, respondents reported that their organizations are, to an increasing degree, defining strategies, or piloting or launching products and services that take advantage of the Internet of Things (IoT). The momentum is evident in their expectation of a two- to three-fold increase in connected insurance initiatives over the next three years, not only in the more mature area of auto telematics, but also in homes and buildings, health and fitness monitors, and other wearables.
As evidence of this, 39 percent of insurers reported that they have launched or are piloting connected insurance initiatives, up from 10 percent in 2014. And a whopping 50 percent of European auto insurers have launched or are piloting telematics systems. Also notable is that 26 percent of insurers say they have launched or are piloting artificial intelligence or robotics initiatives.
Leading insurers view the disruptive impact of the IoT as an unprecedented opportunity to drive growth. It offers the potential to move up the value chain, from providing only indemnification for a negative event or a loss that has occurred, to a more proactive, positive role where they continuously help customers prevent the loss.
The IoT can also offer insurers a better way to respond to customers’ changing expectations through ‘living services’—services that respond to digitization and changing customer expectations by wrapping around consumers, constantly learning more about their needs, intents and preferences. This allows them to flex and adapt to make themselves more relevant, engaging and useful.
Over the next five years, sensors, the cloud, connected smart devices and real-time analytics will combine to deliver a new layer of connected intelligence that will revolutionize the ability of insurers to offer interesting and increasingly indispensable digital services to consumers. Those insurers not onboard should be prepared to lose market share.
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