Just when we thought we had the measure of technology disruption, along comes the Internet of Things.  Like the Internet before it, the Internet of Things—a world where existing objects from industrial machines to cars, refrigerators, and even people, plants or animals can be connected to the Internet to collect and receive data—will undoubtedly impact us all.  The question is, are we ready?  When Accenture asked that question of 1,400 C-suite decision makers across a range of industries, there was a mixed response.  So although the majority of C-suite leaders see the Internet of Things as a net creator of jobs and expect to be able to reduce operational expenses using it, only seven percent are matching strategy with investment and nearly three-fourths said they have yet to make concrete progress with the Internet of Things.[1]

According to Celent,[2] uncertainty around the future of the Internet of Things reflects the views of insurers.  In a survey launched at the end of 2014, Celent found that one-third to one-half of C-suites, in all sizes of insurers, believe that the Internet of Things will either substantially change how they do business or will be an important factor. On the other hand, one-quarter to one-third say it is too early to tell.  And of those that are starting to make progress with the Internet of Things, it is unsurprisingly personal automotive that is leading the field, with no take up from large insurers in the homeowners space.

For my own part, I find the prospect of the Internet of Things, and what it means for insurers, an exciting one.  As we are seeing in the automotive sector, real-time data capture is a compelling argument for how fast someone is driving and whether an insurance claim is valid.  And recent reporting that motorists will be penalized for drinking or using mobile phones, even if the computer is in control in a driverless vehicle, will also have implications for insurers.[3] The prolific number of embedded sensors in all kinds of products and the introduction of robotics that augment the workforce can make life easier for insurers, too.  Imagine the insurance workforce of the future where simple claims payments are handled by a machine, freeing up even those offshored employees for more complex, value-add tasks.  Indeed, any repeatable processes could employ robotics, augmenting the workforce and taking cost out of your business.  In this way, insurers can manage current demands in a modular fashion— replacing core components over time with a little interim help from automation.

Accenture is working with a couple of insurers in the United Kingdom today, introducing a “bite-sized approach” that incorporates robotics to support their businesses as they meet the pressures of upgrading IT and embracing change. Indeed, this modular approach is where the Accenture Duck Creek Suite comes into its own.  Our software means insurers can replace core legacy components over time—everything from rating through to the customer quotation experience, underwriting, billing and claims.

They say that “prevention is better than cure” and for today’s insurer the challenge is not so much in processing claims as putting risk management measures in place to help prevent or minimize a claims.  By welcoming the Internet of Things, insurers could not only potentially reduce insurance costs, but also make things considerably better for their customers in the long term.

Interested in this topic? Contact me today jonathan.e.rusby@accenture.com.

[1] Source: “From Productivity to Outcomes: Using the Internet of Things to drive future business strategies,” Accenture 2015

[2] Source: Are insurers ready for the Internet of Things? Celent, October 2014

[3] Source: Insurance Times, 19 January 2015

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