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Mehmood Mansoori

Mr. Mehmood Mansoori is a member of the board of executive management, and group head at HDFC ERGO General Insurance

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Insuring Businesses that Use Internet of Things (IoT)

There’s definitely a shift in paradigm. IoT is slowly altering the way people use devices and insurance professionals are savvy-ing up to this behavioral change.


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Today’s new age consumer lives in cyber space with their entire world squeezed-in on their smart phones. Right from business to entertainment, all rests in these small devices. Their interaction with the world is now largely reduced to these devices. They research, seek counsel from their friends and other consumers in the social world before they buy. Gone are the days where it was easier for insurance agents to seek appointments to convince the customer.

With shift in paradigm, conventional set of technologies like Customer Strategies (with Customer Relationship Management) are taking a backseat and are being replaced by Digital Strategies. Business models are changing rapidly and getting built around technology. With digitally evolved consumers, innovations in products and services have gone to the next level. Analytics, machine learning, robotics, social networks coupled with Internet of Things (IoT) are creating new opportunities for innovators in the Insurance space.

According to Gartner, there will be over 26 billion connected devices by 2020. While IoT is essentially the linking of physical objects with sensors embedded, the technology is slowly altering the way people use devices and insurance professionals are savvy-ing up to this behavioral change.

Insurers are trying to exploit technologies to differentiate high risk from low risk and come up with differential product and pricing for both retail and corporate customers. Powered with technology insurers are thinking beyond distribution and focusing more on value additions for customers and investing in technology startups. 

Efforts are to work with corporate customers on effective risk management strategies by technologically enabling them so that industrial accidents and disruptions are avoided. IoT devices like fire and water leakage sensors can stop several damages to the industries. IoT sensors can help worker handle assembly safely and thereby avoid personal injuries, lowering absenteeism and higher productivity. This in turn helps insurers, minimize losses arising out of business interruption of clients due to industrial accidents.

For retail consumers, insurers have been integrating IoT devices with health insurance thereby encouraging healthy living in customers. It’s a win-win situation for customers. Increasing adoption of mobile wallets and access to digital world has opened new opportunities for insurer to reach out to consumers in various towns and villages in a cost effective manner and design innovative products suiting various segments. A connected eco systems of agents, brokers, customers is helping build a business model, where information is accessible to all stake holders on finger tips, making it easier for agents and broker to sell and service customers in real time.

This unique convergence of technologies like, data sciences, mobility, IoT, artificial intelligence (AI) is set to change the way insurers did business in the past and will open new avenues for innovation of products and services. On one hand technology will help simplify huge transactions and bring efficiencies, digital, on the other hand will facilitate seamless distribution in a cost effective way with AI and analytics automating underwriting and fraud controls.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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