Trends in Home, Life & Auto Insurance Industries
The insurance industry in the U.S. has been undergoing some changes recently thanks to the Affordable Care Act and other legislation. And yet, the industry is still gargantuan. In 2015, the insurance industry’s net premiums written totaled $1.2 trillion. According to the Insurance Information Institute, there were 5926 insurance companies in the U.S. There are few common insurance types like home insurance, auto insurance, life insurance and health insurance etc.
But the changes are just beginning, as the (IoT) is set to transform the insurance industry in new and exciting ways. Future insurance will look many different thanks to (IoT). Which will touch home insurance, life insurance, auto insurance, and health insurance?
There are currently auto insurance industries trends to go that demonstrate this change. And broader trends in the insurance industry are also creating presences felt. Below, we have knowledge of how the (IoT) will affect each of these insurance sectors. In view some technology insurance companies that are at the forefront of these changes.
1- IoT in Home Insurance
Home insurance is a compulsory means of protection from weather damage or other problems and accidents. If a tree falls in your front room, a correct insurance set up save cash and stop headaches. But the IoT can make the whole process even easier. In fact, IBM notes that proactive management through IoT devices is a major part of that process.
To imagine the wonderful performance of sensors are constantly compiling data in your home regarding water usage, temperature, energy consumption, and more. These sensors alert that there is a water leak in your home before any more damage or loss. This would cause claim avoidance for the insurer and disruption avoidance for the customer.
Home insurance executives also often provide discounts to their customers for using their smart home devices. According to Safeguard-the-world, home with an alarm system is 3005 less likely to be robbed than a home without one. Also home with a connected smoke detector that automatically alerts the fire department could save insurance companies up to $35000.
2- IoT in Life Insurance
The IoT is helping insurers to accurately price premiums because of the vast amount of data. IoT devices generate allow companies to create superior risk assessments, create better models for future insurance payouts. Also, draw in new customers through a wider portfolio of insurance offerings.
For life insurance companies, this typically includes gathering data from other wearable devices. Such as Fit-Bit and Nike + Fuel – Band, to more accurately assess the health of the client. Now the company can adjust and handle the pricing of its life insurance policies as necessary.
3- IoT in Auto Insurance
Many auto insurance companies are starting to use IoT, commonly through connected cars, to track drivers habit in real-time. This practice has become known as usage-based insurance (UBI) and has surged in popularity in the last two years.
In 2015 Nielsen survey, 20% of U.S. household took part in a UBI plan, up from 13% in 2014. After offering this service, auto insurance companies can more perfectly price their premiums and also provide more savings for their clients. But it does not stop there, as 74% of insurance executives believe the IoT will disrupt the industry by 2020. 74% plan to invest in developing and implementing IoT planning by the end of this year, according to an SMA Research survey.
An this is a wise strategy, as IoT car safety technology has shown to significantly reduce crashes. Technofinite hopes U.S insurance companies will save $45 billion for upcoming next five years as a result.
4- IoT in Health Insurance
The IoT grow up day by day in the healthcare industry as a whole, and that growth will filter into the health insurance realm.
Similarly, life insurance companies, health insurance companies are largely using wearable devices to keep track of their client’s health. Several companies have started programs that reward their employees for healthy lifestyles like as sleeping well, burning calories. And wearable is a major part of keeping track of this data. Told Forbes, Vik Renjen, SVP of Sutherland Global Services.
But that’s only one application. Renjen notes that additional GPS data could allow the wearable to track and send data on compliance to a rehab standard for a disability claimant. Better compliance would lead to a quicker rehab process and get people back to work faster, which save money for the plan sponsor, carrier, and customer.
Future applications could include blood analysis that could predict heart attacks and send proactive alerts.
Companies Leading the way
Progressive: Progressive’s UBI policy, Snapshot, is one of the most successful in today’s auto industry. The company has statement about that Snapshot has helped for boost customer retention thanks to the wider range of discounts it lets Progressive offer its clients.
The company offers a 15 percent maximum discount on life insurance for clients who permit their Apple Watch apps to monitor their activities. Clients can even accumulate discounts by submitting bar screenings or employing a fitness center.
State Farms provides clients with discounts for installing an ADT Pulse security system and a Canary all in one smart home security device. The discount affects the worth of the products themselves, additionally because of home insurance.
The IoT can really begin to induce its hooks into the insurance trade within the next several years and alter it from or within out. But this is far from the only sector that the IoT will pro-foundry alter in the coming years.