Internet of Things [IoT] is a term that encompasses all physical devices that are connected wirelessly to a network, mainly used to exchange the one thing most valuable to an insurance company – data. The insurance industry definitely tops the list of the oldest industries in the world. Evolving digital transformation provides opportunities across all industries — especially the Insurance sector. In recent times, the industry has seen digital transformation occur in phases with smartphones, Social media, cloud services and other technology based elements [AI, VR, ML and more].
IoT and insurance claims
IoT has begun to radically disrupt the traditional insurance business model and modernize systems and processes. And in this industry, “things” in the IoT includes multi experience platforms such as smart devices, wearables, sensors across everything that a person owns, even connected vehicles that use telematics. One of the areas where IoT has been making waves is in claims registration and processing, which is data heavy, time consuming and where the insurers are overloaded with requests. It is one of the most sensitive aspects of an insurance company.
Some of the challenges faced by the companies are,
- Inability to offer superior customer experience
- Manage and process each claim efficiently
- Accuracy of data captured
- Improve claims outcomes
- Transparency and visibility of process
- Time taken from the time of submission to closure of claim is too long
- Losing customers and business because of tedious processes
To meet the growing and changing customer demands and beat the competition, IoT is being adopted by enterprises. This has significantly improved a customer’s experience and ensured processes are streamlined as well. This not only increases sales for the agents, and profits for the organisation but also results in better customer retention. The only challenge for insurers is identifying which solution will work best, and integrating them into the existing claims processing system.
Benefits of IoT
IoT has the potential to automate claims related data collection, thus ensuring the entire journey is efficient and effective. Let us look at the few ways where IoT makes a difference in managing the claims process.
Automation & Cost Impact –
With the level of automation involved in IoT, it helps insurers save cost by as much as 30% [Source: Forbes]. Another benefit is that this money saved could be passed on to the customers; an option being lowering insurance premiums paid by the customer.
First Notice of Loss –
The last thing a person who has suffered a major loss wants to do is reach out to their insurance agent to file a claim. Alternatively with IoT, the insurer could get an alert of the loss and get in touch with the customer. This could be a proactive step built into the claims registration system. What this also does is ensures the data related to the customer is kept ready for when the final validation or confirmation is received from the customer.
Data & Fraud Instances –
When a company adopts advanced technology and digitized systems in place, the data captured from the customers is far more accurate. Most of the data will be pulled out from their policy files, which ensures easy comparison and validation of the data entered at the time of claim submission. Insurers can also detect fraud instances easier, recommend new products and create a better relationship with the customer.
Using digital platforms and technology gives insurers the much-needed opportunity to understand their customers better. This enables them to offer services, provide timely assistance and ensure the customer has a good experience at the end of the day.
All said and done, IoT-based service is not confined to only claims processing nor is it without challenges. But it is a growing technology, and does extend to other aspects of an insurance business. To know more or understand how you can adopt this to your business, reach out to us.