Imagine while driving home in a telematics-enabled electric car, you, as a consumer of insurance, speak to the vehicle informatics system to disarm the home burglar alarm, open the home’s garage door, turn on the lights, lower the shades, unlock the doors and adjust the thermostat to make the home comfortable for the evening. Imagine as well that the car docks in the homeowner’s garage for recharging and communicates with the home that it has arrived.
When entering the home, you use voice commands on Alexa to shut the garage door, get the news, check on the status of a claim and listen to music. While cooking, the refrigerator keeps tracks of household meal needs. And if dinner gets burned during meal preparation, the homeowner once again uses voice commands to tell the smoke alarms to ignore the kitchen smoke.
During the meal, the doorbell rings, and the picture and voice of a person at the door appears on the insured’s cellphone for response. Not wanting to speak to the person at dinnertime, the homeowner sends the caller away. After dinner, you browse the internet on a smart TV, order a movie, get sleepy and head off to bed.
At bedtime, you use voice commands to turn off the TV and lights, engage the alarm, check on the thermostat temperature, and view the status of home systems such as heating or cooling and the solar panel battery backup for optimal functioning. Before dozing off, you check the mobile for the total steps accrued on your wearable during the day.
These “futuristic” scenarios are here today in the form of Internet of Things (IoT) that control many types of connected devices available in the marketplace. Right now, data from sensors and internet enabled devices is empowering an insured person's control over their smart home, vehicle and personal health. The value and benefit to the insured is easily seen, but imagine the value of the data from all these interactions to insurance companies to better understand and service the customer, as well as to better assess insured risk.
Several insurance companies are leveraging IoT devices and data including:
- Amazon Echo, Google Nest use for billing, claims status, quoting, finding an agent and risk messaging
- Remote Access Security to provide specialized home protection services, including access to property protection and, 24/7 professional monitoring against intrusion, fire, smoke, flood, and carbon monoxide
- Telematics offerings that provide auto discounts and driver risk messaging
- Wearable Devices to provide insureds incentives to stay fit as part of their life insurance progra
- Drones for property damage assessment and pricing
- Connected Toothbrushes for dental health
- Connected Doorbells for security discounts
While many insurers are offering more sophisticated and mature vehicle IoT through telematics programs, the home and personal health programs continue to develop. Once these insurance programs advance and mature, insurance companies will realize significant value from the data as it becomes part of their total data fabric.
Granted, the profitability of IoT has yet to been fully proven out—and there are privacy concerns and risks that will need to be addressed—but the future will offer a complete data continuum of the insured's behavior and risks that has great business and analytic potential for carriers.