American specialty insurer Hartford Steam Boiler (HSB) is turning to the Internet of Things in a bid to transform the insurance industry and make managing risk easier.
HSB is using sensor technology to monitor business equipment and facilities, something it believes could save millions in losses for insurance firms and their customers.
HSB has been looking at ways to collect and assess data for a few months now, and has finally launched a new IoT-based turnkey service that could revolutionize the industry.
The service analyses data and sends alerts to policyholders via email, phone call or text message when an issue is detected and needs attention.
Sensors to the rescue
In a pilot of the technology with Church Mutual Insurance company, HSB deployed a mixture of sensors and helped customers save over $500,000 by avoiding issues with frozen pipe leaks.
Both companies are to work together on the service and expand it to thousands of houses of worship insured by Church Mutual. This, they hope, will stress the durability of the technology.
Connected technology will play a big role in the company’s operations over the next few years. It will continue developing its IoT services, installing sensors at commercial locations to monitor and manage potential risks.
The firm will be running a program for client insurance companies, where they can make use of connected technology. Services will be tailored to reflect the types of businesses and risks covered by the insurers.
HSB using IoT to offer value-add services
The rise of IoT is leading many insurers to explore how sensors and new technology can help them and interpret data for their customers. Greg Barats, president and CEO at HSB, said his firm has been exploring IoT extensively.
“The rapid advances of new technologies are increasing the demand for value-added services that are included with insurance coverage,” he said.
“HSB has used its extensive equipment data and experience with IoT-based systems to develop an early warning system for insurers and customers.”
Richard Poirier, president and CEO at Church Mutual, is confident that IoT can bring a plethora of benefits for its customers and is happy to have partnered with HSB.
He said: “At Church Mutual, we embrace innovation. We want our customers to thrive, and partnering with leaders such as HSB in advancing technology helps us help our customers.”
Peter Röder, member of the board of management of partner firm Munich Rem said: “HSB is building on its deep technical expertise and transforming itself toward a new value proposition that shields its clients and partners from the complexity and churn of the technology world, to power Munich Re’s efforts to lead the disruption of insurance from IoT.”
This isn’t the only thing HSB is doing with IoT – at last week’s Internet of Insurance conference in New York, Barats detailed how the company invested in IoT start-ups Waygum and Augury, as well as how the firm has deployed 1,700 sensors across 325 locations already.
IoT makes mark in insurance
Shaun Russell, director financial services UK and Ireland at Informatica, said IoT is already having a big impact on the insurance industry and is refining services for customers.
“The Internet of Things is already making its presence felt in the insurance industry: through the use of telematics data to determine vehicle insurance rates, for example, or health related data for life insurance,” he told Internet of Business.
“By consuming fitness tracker data, for example, insurance providers can better calculate risk and refine existing products which helps them to generate new revenue streams based on a particular user’s lifestyle.”
Andy Thomas, managing director at identify protection specialist CSID Europe, said insurers need to be aware of the data they’re monitoring and ensure they aren’t breaking any protection laws.
“For insurers, the challenge is assessing any new risks posed by these devices within the insurance policies they offer, whether protecting against the breach of new personal or commercial data types or domestic contents insurance where a break-in could occur if an alarm is disabled,” he told IoB.
“Greater transparency will be needed in the underwriting and rating processes, which will lead to more accurate risk assessment and pricing. IoT will also help businesses maintain their assets more effectively which could lead to reduced claims.”