Challenges for IoT in the insurance industry

Want to know about insurance technology trends 2020? This area is progressing at the same rate as the rest of the world. Any business needs development and protection. IT companies have reached such a level of development that cryptographic protection has become more important than physical. Even with physical access to a computer, an attacker will not be able to open or download encrypted data. Modern household or commercial appliances are equipped with “on-board computers”. IoT insurance has gained great importance. If hackers manage to steal data, the owner of the equipment will receive compensation for the damage.

Internet of things insurance

The use of insurance internet of things in the business model brings extra benefits to this industry. For example, this technology allows insurers and their customers to interact directly. Also, the electronic algorithm collects and provides more complete data. This helps to more assess the risks and select the type of insurance. IoT allows you to set up automatic notification of an insured event based on sensor data. The management of the insurance company gains access to data on customer behavior. This simplifies further work with them and helps to identify cases of fraud.

Disruption to existing insurance business models

The existing schemes of work of insurance companies are outdated. Now the use of Internet technologies leads to irreversible changes to the entire existing system:

  • Insurance companies receive detailed information about the behavior of the insured;
  • Insurers can track the entire history of the use of the insured item;
  • Clients do not need to prove their case. All events are recorded automatically and transferred to the insurance company.

The above provisions lead to more global consequences. Insurance companies’ earnings will decline due to the lack of the need to buy extensive insurance. Customers can only insure certain equipment. Besides, it is enough to buy an insurance policy that covers a narrow list of situations. New services that will help insurance companies earn money have not yet been thought out. At the same time, the use of IoT helps to control user behavior. The algorithm calculates customers who violate the operating conditions instantly. This approach allows us to provide discounts to responsible users.

Data management

In the past, data processing by insurance companies could take a week or longer. This led to the loss of customers. The emergence of specialized applications and billing systems has led to an increase in the flow of new information. When introducing IoT into the insurance system, it is necessary to provide for a way of processing information. The system should be able to process traditional paper forms and data from the Blockchain algorithm. More information can be found on the Dataart blog:

Data ownership

Until now, no laws have been developed that clearly regulate the ownership of information. When IoT is used in the insurance industry, data flows simultaneously to both the client and the insurers. Currently, there is no protocol to resolve such disputes.

Fraud and Securing Data

Using large amounts of personal data about users always attracts hackers. Insurance companies, when switching to work with IoT, must ensure the security of personal information about each client. For example, Blockchain technology can cope with this task. Yet, experienced IT teams should work on implementation.