Insurance may traditionally be seen as a laggard as far as new technology is concerned, but that perception is quickly changing thanks to the Internet of Things (IoT) and the arrival of new business models. IoT in insurance is fast becoming reality…
With that in mind, we here at the Internet of Business decided to look at the top ten, real-life case studies where IoT in insurance is resulting in disrupted insurance products, processes and business models, not to mention happier and healthier customers.
Progressive, the US car insurer, is using its usage-based-insurance (UBI) telematics programme to monitor how its car insurance customers drive.
Using an ODB telematics dongle and machine learning, the insurer is able to judge how a driver is performing on each journey. By doing this, the insurer is able to price more accurately on an individual basis, while the approach also rewards safer drivers with reduced premiums.
To date, the company has made over 1.7 trillion driver observations and says that its prices are based on “how you actually drive, rather than just on traditional factors like where you live and what kind of car you have.”
The firm has also partnered with Zubie, the maker of a device that plugs into your car and can help you track how well (or poorly) you are driving. The agreement lets Zubie customers see how Progressive would charge them based on the driving data that Zubie collects.
Liberty Mutual has partnered with Google’s Nest to implement connected smoke alarms in the home, enabling customers to reduce the risk of a fire, and in turn reduce their home insurance premiums.
Nest tells the customer where there’s smoke or carbon monoxide, gives alerts on their phone, while the Split-Spectrum sensor looks for fast and slow-burning fires.
Liberty sends these $99 Nests out to customers free of charge, and will take up to five percent off customer insurance premiums once installed. This is a great example of IoT in insurance pushing insurers to increasingly become lifestyle companies or advisers.
Insurance heavyweight John Hancock was one of the first to leverage the power of wearable devices, partnering with Vitality to distribute free Fitbits to customers, so that they could track their well-being.
John Hancock incentives customers to stay fit – thus making them less at risk of filing a claim – by offering entertainment, shopping and travel rewards and discounts.
The use of drones is increasing in the commercial world, and arguably no more so than in insurance where Erie Insurance has been using them for property inspections in the event of a damage claim.
The firm claims it was the first insurance company to seek and receive permission from the Federal Aviation Administration (FAA) to use drones commercially, and says that the benefits are numerous; from speeding up the claim process and looking at damage without endangering employees, to getting a clearer picture of potentially fraudulent cases.
Metromile claims to have developed the first pay-per-mile car insurance policy using telematics.
Metromile Pulse offers ODB2 port to wirelessly transmit data to the smart driving app, claims to save $500 each year.
From the app, drivers can then access insights to personalized driving trends and diagnostics – providing a more informed and connected experience. Those not ready to switch insurance providers can access the Metromile App in beta and receive many of the same features that insurance customers enjoy.
The smart toothbrush may sound like a gimmick straight out of the exhibition floors of CES in Las Vegas, but try telling that to Beam Dental who is pricing dental insurance around those very products.
Yes, Beam Digital provides a smart toothbrush to every customer and monitors their oral health, as well as using this information to support a dental insurance plan.
Beam sends the customer notices and encouragement if their brushing habits are falling short of the required standard, and hopes this will result in improved dental hygiene — and reduced premiums.
The company’s insurance plan gives away a toothbrush to each member, and hopes to reduce the cost of premiums by up to 25 percent.
With State Farm’s Drive Safe & Save telematics programme, a smartphone and beacon tell the insurer exactly how the customer is driving, a move that can apparently save the customer up to 50 percent on their annual policy.
By using information from the vehicle’s OnStar or SYNC communication service, or mobile device, State Farm is able to get a picture of the driver and his or her driving habits. The less you drive and the safer you drive, the more you could save on your auto insurance.
American Family Insurance and Ring
The rise of the digital doorbell has knock-on effects for insurers, and this is something American Family Insurance (AFI) is looking to tape into, having partnered with Ring to improve home safety.
The Ring doorbell is a HD video home security system, and the firm has partnered with AFI so that insurance customers can get $30 discount off the $199 Ring Video Doorbell.
American Family customers who use smart home devices may also be eligible for the company’s Proactive Home Protection discount (up to five percent) on their homeowners, renters or condo insurance policies.
Oscar and wearable trackers
Promising health insurance start-up Oscar, which got $32.5 million of Google investment late last year, has partnered with Misfit to give a free Misfit Flash tracker to each of its members, in order to help them get fit.
Each Oscar member gets a wearable and has the chance to earn up to $20 a month in Amazon.com credit – so long as they meet their step goals.
Oscar also has a mobile app that includes step tracking, a doctor finder, access to health history, and the doctor on call feature. The app also connects to Apple Health.
…The future of IoT in insurance
It is clear, from the above, that the role of IoT in insurance will continue to grow as insurers become more tech-savvy, and as many more millions of devices connect to the Internet. With this resulting in copious amounts of data, insurers will look to leverage this to improve how they price risk, rewarding those customers deemed to be ‘safer’ than others.
The future will also likely be impacted by the increasing move to machine-to-machine communications, Artificial Intelligence and cloud computing, with algorithms determining our movements and actions.
The Internet of Insurance US is taking place in New York on the 27-28 September, exploring the profound impact of IoT on insurance business models and customer relationships.
The summit features cutting-edge case studies from USAA, Progressive, Liberty Mutual and many more, as well as high-level speakers from AIG, American Family Insurance, Manulife and Swiss Re. Click here for more information or here to book.