There’s a great opportunity for claims management with IoT (internet of things) but it’s not being put into practice according to Matteo Carbone, founder of the international incubator Connected Insurance Observatory.
Carbone was in Toronto meeting with eight major insurers and “some” suppliers, the identities of whom were not revealed, seeking partnerships for insurtech innovation and experimentation.
“The long awaited usage for IoT is to better address claims management,” Carbone said. “First of all, you can have objective information for what happened, improving how you address the claim. Second, you can be proactive. You no longer need to wait for the first notification of loss. You can anticipate that. Third, the more challenging area but one of extreme value, is prevention.
“If you’re able to change risky behaviour, really you are adding value. You’re not only optimizing the payout, but you are really improving the level of risk in your portfolio.”
IoT presents opportunities to brokers as well, Carbone argued, in the form of customer rewards-interaction like cash-back at gas stations for auto policies, a common practice in South Africa. In Italy, where Carbone hails from, one in five cars use telematics in conjunction with their auto insurance.
“If you are looking at a personal lines solution, a huge corporation can figure out how to use a wearable, for life, for health, it’s pretty simple,” Carbone explained. “But when you move to address specific sectors like manufacturing or construction, you need to know the process that is there or the type of technology you can use or that already exists. So probably, the specialization of an MGA could be their entry point to bring the next wave of innovation for connected insurance.”
Carbone was somewhat surprised about the level of broker engagement, Patrick Vice, partner and director of products & services at Insurance-Canada said.
“Some brokers are as far along with insurtech as some of the insurance carriers as well,” Vice noted. “Using the same methodologies, setting up new organizations through MGA roles, this is due to the strength of the independent broker, and their abilities to come together and do the types of things that insurance companies can do as well.”
When asked if IoT could prevent overland flood losses or assist with the shortage of claims adjusters responding to floods throughout the country, Carbone said he was sure the technology existed but the actual value proposition of selling it in an insurance policy doesn’t yet exist.
“It’s not enough to take an insurance coverage, take a technology, put it together and shake it a little. You need to figure out how create something that solves a problem for the customer. You need to be able to present data in an exacting way and on the other side, that can be sold,” Carbone said.
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