What IoT has in Store for Life Insurers?

Insurance CIO Outlook | Thursday, September 09, 2021

In the current environment, life insurers are leveraging IoT to predict better, evaluate risk, and gain a 360-degree view of their customers across product lines, and so much more.

FREMONT, CA: Internet of Things (IoT)-backed disruptions represent the start of a revolution for the insurance industry. IoT can create massive opportunities for insurers, especially life insurers. IoT has facilitated the development of more personalized life insurance products and services.

Life insurers have explored much using connected technology, especially wearables, to enable activity-based insurance discounts. Fitness devices have the ability to expand insurability to people who are demonstrating active management of health. Data from wearable devices can help life insurers conduct a risk analysis better. By understanding patterns of healthy behavior, the devices can help improve the users’ quality of life and the safety of their surroundings.   

With the implementation of IoT, the future relationship of customers and life insurers will be directly dependant on the ability of the life insurer to educate, inform, and engage with their customers. Changing demographics have profoundly influenced the insurance customer profile. The current generation has different buying expectations than previous generations, as this group of digitally native consumers use connected devices for anything and everything. With the availability of smart connected devices, customers are now able to research and purchase products, benchmark a brand’s products and services against its competitors and trust the advice of peers rather than professionals. They will bring the same values and practices to the life insurance buying process too. Life insurance companies can safeguard against this obsolescence by creating programs that utilize IoT technologies. Insurers must tailor robust frameworks that will enable technology-powered insurance products that can more easily adapt over time.While adopting IoT, regulation is a fundamental challenge for life insurers. Insurers are expected to keep a balance between the desire for products and changing consumer expectations while maintaining financial stability and protecting consumer privacy. 

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