“In 2018, we expect IoT devices to lead to personalized solutions in the area of health insurance, and lead to a move from Reactive Restitution models to Proactive Prevention models.” – State of FinTech Report 2018[1], MEDICI
Insurance 2.0 will bring new business models, opportunities for niche positioning, as well as enhanced profiling and predictive decisioning, powered by ubiquitous device connectivity and real-time, actionable analytics.
“It is estimated that up to 50 billion devices will be connected to the Internet by 2020. This equates to approximately six devices for every person in the world. Of course, connectivity comes with a cost. Leading companies are budgeting more than $100 million annually developing IoT systems today. Companies as diverse as GE, IBM, Cisco, Samsung, and Monsanto are currently investing billions into their IoT and analytics initiatives. Samsung alone is moving towards having their entire product line IoT-ready in the next five years.” – Ron Schaber, Second Vice President, Munich American Reassurance Company, in The Internet of Things and Life/Living Benefits Insurance[2][3]
Advanced sensory technology[4] also has a role to play in how growing IoT ecosystems collect data, getting underwriting to a whole another level with the opportunity to put together historical data and detailed streams of current data from a variety of connected devices. According to IBM, sensor-equipped devices transmit huge amounts of data, but analysis is needed to gain actionable insights.
“Advanced analytics can identify a policyholder’s risk profile, but also provide valuable feedback. With IoT for Insurance, insurers can use both structured and unstructured data to help policyholders manage a multitude of risks.” – IBM
Health insurance is one of the most important areas where connected devices will drive positive transformation for all parties involved. Driven by the ability to collect real-time health condition and change data, health maintenance organizations, businesses, and insurers will be armed with a foresight into appropriate risk management & loss prevention opportunities, as well as understand the impact of wellness programs and how to tune them for increased treatment efficiency & individual productivity. Interestingly, some estimates[5] suggest that for every dollar spent on preventive care, employers can expect a $3 return.
Fortunately, a total of over 500 million[6] units of smart wearable devices are forecasted to be sold by 2021, which will include more than 80 million smartwatches, 5.6 million body-worn cameras, almost 64 million wristbands, over 22 million sports watches, and millions of units in other categories.
Sports watches and other categories of condition monitoring devices can be used to track health and adjust policies based on risks associated with lifestyle. Some examples of linking personal devices to insurance include Erie Insurance’s tie-up with Google Glass and Beam’s connected toothbrush (the Beam Brush[7]).
Oscar Healthcare, for example, started experimenting with enticing people
