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The Internet of Things (IoT) refers to the interconnected network embedded in devices, enabling them to send and receive data. By 2025, there will be 41 billion connected devices. Insurers can take a proactive, rather than reactive, approach to risk by leveraging IoT data. Instead of responding to issues or incidents after the fact, teams can now predict the occurrence of events.
Insurers are increasingly utilizing IoT to identify property losses sooner. One way they’re doing so is by deploying leak censors at commercial, institutional and residential properties to stop water leakage almost before it starts. Chubb, known as the world’s largest publicly traded property insurance company, has installed hockey-puck-sized sensors in more than 300 Chubb-insured buildings to detect and minimize water damage. Two years into its sensor strategy, the company has concluded that the wireless devices have prevented millions in property losses.
The following are benefits of embracing IoT as a standard feature of insurance policies:
Optimized risk assessment and prevention—IoT devices can alert the insurance company and their customers to any irregularities, such as fires, water leakage, and heat and gas leaks. If insurers can identify issues before they happen, they can prevent costly—perhaps even fatal—events from occurring.
Enhanced cost management—Insurers can analyze IoT data to optimize risk prediction to lower the number of claims and reduce an organization’s costs. By leveraging IoT to introduce usage-based pricing models, monetize data insights and improve customer interactions, insurers may see better business outcomes.
Improved customer experience—Insurers can use IoT data to identify gaps in their offerings and customize products and coverage solutions for different customer segments. IoT can also streamline processes, such as sales and claims, to provide a better user experience for customers.
IoT devices are becoming increasingly cost-effective for insurance companies and their customers, and their application has the potential to benefit all parties. For more information, contact us today.
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