The world is quickly evolving and so is the insurance industry. One of the biggest technological advancements in recent years is the rise of IoT and its impact on personal lines insurance.
IoT, or the Internet of Things, refers to the interconnected network of devices, vehicles, and other objects embedded with sensors, software, and network connectivity that allows them to collect and exchange data. In the insurance industry, IoT devices are being used more and more to gather data on risk factors to help insurance companies manage and personalize policies for their clients.
For example, some insurance companies offer discounts to customers who have installed IoT devices such as smart home security systems or telematics devices in their cars, which track driving behaviour and can help determine premiums based on actual usage and risk factors. However, with this increased reliance on technology comes new risks and challenges. At a recent session with Lombard Partnerships and Ami, Cybersecurity was one of the big topics for discussion as cyber threats and data breaches are a major concern to the industry. As more personal data is collected and stored through IoT devices, it is vital that proper security measures are in place to protect against cyber-attacks. The Cyber Insurance Risk in 2022 report from Black Kite, who researched 99 Insurance companies across the globe shows that 82% of the of the largest insurance carriers are the focus of ransomware attacks from cyber criminals. Scary.
I think it’s great that many Short-term Insurance brokers in South Africa are also collaborating and investigating the integration of IoT into their business and risk model. By utilizing IoT devices to gather data on their clients’ risk factors, brokers can work collectively with Insurers to tailor insurance policies and offerings to their clients’ specific needs, resulting in a more personalized and at times cost-effective service.
In addition to IoT, other technological advancements such as artificial intelligence and machine learning are also transforming the way we do business in many industries across the globe. For Insurance, these technologies can be used for a bunch of things, as an example to automate certain processes and provide faster and more accurate claims processing and underwriting.
The integration of IoT and other technology in the insurance industry presents both opportunities and challenges. While it allows for more personalized approach to policies and streamlined processes, it also poses new risks and requires proper security measures to be in place.
I see great opportunity for both short-term brokers and insurers in South Africa and we should be embracing some of these advancements and leverage them to our advantage to provide the best possible service and offering.
Article written by: Kurt Solomon
