We’re starting to hear real buzz around insurance and the Internet of Things (IoT). On the personal lines side, the only fly in the premium ointment might be the consumer, who may not be ready – or willing. However, insurers could have impact here by showing leadership (and perhaps improving results while grabbing a bit of market share as a by product).
There’s also an opportunity to learn more about the longer term direction of the IoT and insurance at #ICEF2014.
Consumers get excited, when they know ….
A recent article from eMarketer cites several sources suggesting that most consumers are not familiar with the IoT. However, when provided with details about the IoT, “67% said they were excited about the promise of greater connectedness.”
But this could change as products become introduced. According to Noah Elkin, executive editor at eMarketer, “As more name brands get into the game, from Apple and Google to big-box retailers like The Home Depot, Best Buy and Staples, just to name a few, expect consumer awareness to grow.”
Unfortunately, excitement is just the start …
eMarketer reports that a survey from SOASTA found 34% of consumers “highly anticipated” the benefits of smart home appliances. However, another survey from AYTM Market Research found that 85% of US internet users did not own a single smart home device.
Insurers have lots of opportunities here to gather data for underwriting and rating purposes. There’s lots to measure. We just need something to measure it with.
Could insurer provide leadership? What are the incentives?
So there is a gap. If nature is just left to take it’s course, according to a survey of experts cited in the eMarketer study, it will be 2025 before the IoT has a widespread impact on consumers.
However, this may offer insurers an opportunity. In a recent post we reviewed the recent announcements by American Family Insurance and Microsoft. These organizations are establishing a business accelerator to help start up companies develop and introduce products to support smart homes.
According to American Family’s release, the investment will serve the needs of its customers for safer homes. Presumably, this also serves the insurer’s interests as well: better underwriting results, improved market share.
So, where to from here?
We’ve heard informally about some activities from insurers and suppliers, but nothing formal as yet. We’d like your thoughts.
Will insurers see the Internet of Things as an opportunity? If so, will we see leadership in from the industry in this area?
See how your thoughts track with one expert’s projections. Don Light from Celent will be providing his insights on the current status and future development of the Internet of Things and insurance over the next decade at #ICEF2014: Insurance 2024.