The Internet of Things (IoT) is making its mark on many industries, but few have been able to latch onto its coattails as easily or quickly as the insurance market. From fitness trackers to in-car telematics, insurers now see the opportunity to drive bigger revenues, and establish better relationships with customers. We look at some industry-leading partnerships.
American International Group announced an investment in Human Condition Safety (HCS) early last year, in a bid to move into the technology market.
HCS may be a start-up, but it is demonstrating how technology can create significant improvements to reduce the frequency and severity of work-related injuries. HCS provides wearable devices, AI and cloud services, while AIG brings the insurance. Smart.
Our cars have become increasingly connected to the internet in recent years, but beyond gimmicky infotainment add-ons how do you truly benefit from this technology?
Telematics is how, and Progressive is one of many insurers that have capitalized on this opportunity. Two years ago, the company partnered with start-up Zubie, which connects cars to the Internet, to reward safe Zubie-using drivers with discounts on their premiums.
Progressive drivers plug in a Zubie Key into their car’s on-board diagnostic port, and the program then provides information directly to the drivers’ smartphone to help consumers make safer, smarter decisions about their driving behavior. Through this partnership, Zubie offers customers the option of sharing their driver data with Progressive in order to earn a discount on auto insurance through Progressive’s Snapshot program.
Cars are not the only objects getting hooked up to the Internet these days. Homes are becoming much more connected and we’re buying a greater number of IoT devices than ever before.
For insurers, this presents yet another opportunity to provide digital insurance policies and products that make insurance easier for customers. That’s why Aviva’s venture capital arm has invested in Cocoon, the smart home security device, which alerts customers if there is unusual activity in their house.
The idea is that Aviva will sell the product along with a home insurance discount, so customers feel safer in their home and get improved insurance premiums.
And that’s not all, Aviva has also partnered with Insurtech firm, HomeServe Labs, to become the first insurer to offer LeakBot – a smart connected water leak detector. You can read about that partnership more here.
Health insurance is also growing in popularity among tech firms and insurers. Recently, American healthcare insurance company Aetna partnered with Apple to provide its members with a subsidized Apple Watch.
The watch comes kitted out with Aetna-exclusive iOS health apps, which the companies say will help to promote health and fitness, so that consumers can manage their health and lifestyles better.
This is all part of a push to empower the patient through the digital transformation of healthcare. The hope is that, by providing patients with access to their health data, they will be incentivized to lead a healthier life, and will also spend less time claiming on health insurance policies, or visiting their doctor.
It’s a simple concept but, as citizen health hacker, Tim Omer, pointed out, the patient is often the problem when it comes to technology adoption.
In a similar vein to Aviva, American Family Insurance did not sit on its heels when IoT entered the home. The company invested in a start-up that develops a product called Ring, a smart doorbell system that allows homeowners to ‘answer the door from anywhere’ via video.
A motion detector records video of whoever approaches the door and uploads it to the cloud before the doorbell has even rung. They call it “caller ID for the front door.”
The benefit for customers using American Family Insurance is that they could get a $30 discount on their home insurance policy and the chance to qualify for a five percent deduction from their premiums once the device is installed. Supposedly, in the event of a burglary Ring offers users a refund on the insurance deductible.
As part of that agreement, users who buy British Gas’s Hive products are apparently redirected to Axa’s website.
Hive is a smart heating system that allows user to control the temperature and hot water in their home from an application on their mobile device. From an insurance perspective, Hive can mitigate the risk of accidents, such as burst pipes, as it has an in-built frost protection mechanism that turns your heating on whenever the temperature dips below seven degrees Celsius. Fewer accidents means fewer payouts, and probably more products sold, so this seems like a sensible partnership.
You can watch our video interview with Hive CTO Seb Chakraborty to find out more about Hive, and their ambitions in the insurance market.
San Francisco-based Metromile is what it calls a provider of pay-per-mile car insurance, whereby low mileage customers can make savings of roughly $500 a year on average.
With 95 million low mileage drivers in the USA, the company believes it has a potential market worth more than $70 billion, which explains why Toronto-based Intact Financial Corp. (IFC) saw fit to invest in the business.
IFC clearly recognized that Metromile is “redefining the [insurance] marketplace” with its technology-driven approach to insurance, an approach which recently saw it partner with Uber to offer a smart driving app experience, and has made its move. Expect more investors to follow suit.
Hartford Steam and Boiler (HSB) – which has been established 150 years and which specializes in insurance for dry cleaners, power generators and refineries — has established some strong partners in the IoT ecosystem. These include its venture capital group Munich RE/Hartford Steam Boiler Ventures, which invested in smart industrial sensor manufacturer Helium earlier this year, a mobile app platform start-up called Waygum, and a predictive machine diagnostics company called Augury.
HSB CEO, Greg Barats, told Internet of Business that the company is pursuing this policy due to the disruption caused by IoT. “The Internet of Things is the next industrial revolution and we have to position ourselves,” he said.
“IoT start-ups are a fantastic way of jump-starting your thinking,” he said, adding that these start-ups are often able to work in a much more open environment than in traditional enterprises. They can, he explained, offer ‘clear thinking’ whilst they are less restricted by compliance and regulatory issues. See the full interview here.
The Insurtech trend has not been lost on China’s largest insurance firm, Ping An. Ping An Ventures – the company’s insurance and banking venture capitalist arm – has invested in Australian start-up, CliniCloud.
This app is a mobile connected digital stethoscope and non-contact thermometer. It’s aimed at young children or elderly people who need to take readings such as their respiratory and heart rate on your phone or secure cloud server. It’s essentially empowering the patient to take care of their own health.
While it’s unclear how Ping An Ventures will benefit from this in the immediate future (although surely these digital readings could be leveraged for pricing and policy information – Ed), watch this space for further moves from this insurance giant.
According to recent reports, the two companies have partnered to aid insurers in bringing IoT devices to market. Supposedly, they will do so by using IoT devices to asses risk and adjust insurance premiums accordingly.
ROC-Connect’s Kevin Meagher said that “Data from devices in the home, information on the services customers use, and insights into personal behavior, will all help insurers make smarter decisions and to develop better business models.”
For the full story, see here.
The Internet of Things offers profound opportunities for insurers to better understand risk, impose preventative solutions and differentiate product offerings in an increasingly competitive marketplace. Through a combination of best practice industry case studies and expert insight, the 2nd annual Internet of Insurance explores the business case for IoT in the industry.
Speakers include Monika Schulze, Global Head of Marketing at Zurich, discussing the role of smart glasses and augmented reality in collating and documenting claims information. Likewise, Florence Tondu-Melique, COO at Hiscox Europe, will be speaking about the merits of offering preventative cover over reactive.There will also be talks from senior executives at Axa, Swiss Re, Vitality and BNP Paribas.