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How the Internet of Things Expedites Claims Processing

By Insurance CIO Outlook | Thursday, August 08, 2019

 Internet of Things Managing claims can be significantly simplified and made customer-friendly with technological interventions like IoT devices.

FREMONT, CA: For the insurance industry, optimizing claim processing and management stands quintessential. IoT can make the process highly streamlined, fast and accurate for customers. There are significant areas where IoT devices can prove advantageous for both the policyholders as well as the insurers. By making processes data-centric, IoT enables the industry to overcome many hurdles and make claim processing smoother and less time-intensive.

Using the technology of IoT, physical devices are connected with the internet to form a smart network. These physical devices at various endpoints capture essential data through smart sensors and pass it on to stakeholders. In the process of managing claims, this can help insurance companies monitor accidents directly. By using sensors in cars and homes that they provide coverage to, firms can, in real-time, take note of any damages that happen. From the moment an accident occurs, these capabilities can assist in companies in initiating the claims process autonomously.

For example, there happens to be a road accident in which a client of a particular insurance company is involved. The insurance companies can depend on a network of sensors present in the car to alert it regarding the occurrence. The policyholder does not have to reach out to the service provider in distress. Instead, the insurers can reach out and deliver a compassionate message to affected clients and initiate claims process on a note of care and concern. Such kind of proactive outreach is possible with IoT giving firms an opportunity to provide a unique experience for clients.

After an active initiation, IoT devices also allow firms to carry out automated data collection. These data are extremely valuable from the point-of-view of claim processing. Going by the traditional way, insurance firms have to manually collect data regarding the losses and damages as the first step. This also involves talking to the clients about details regarding the damages. However, post-accident, most customers are in high-stress conditions, and sometimes that becomes a hindrance in the process of collecting data. If fire alarms and smoke detectors in homes have smart sensors or if vehicles have indicators that are IoT-enabled, then firms have access to accurate data from before, during and after the event of damage.

Precise collection of data is also crucial to mitigate frauds. Since assessment is done in real-time, there is no chance for policyholders to project extra damages in the expectation of increasing the number of claims. However, there are a few considerations that firms must keep in mind while incorporating IoT. Security from data breach and minimization of false alerts are a couple of areas that companies should prioritize. Maintaining high levels of transparency regarding how the data from IoT devices are being used is essential to keep policyholders at ease.

With the popularity of mobile devices, insurance firms are also taking services to mobile platforms. Customers are now in a position to start and track claims processing as and when it happens. When IoT devices are involved in the process, the whole process becomes supremely streamlined. Customers are kept updated regarding every step. Adjusting and evaluating claims automatically through the technologies of artificial intelligence and machine learning eliminates delays and human errors. Through the apps, firms can also link up clients with service providers who are to provide remediation.

The insurance industry is in an excellent position to get the best out of IoT and add value to the services it provides.

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