Re-imagining insurance using data insights

Aug 23, 2017

In the past 2 decades with proliferation of computers in our everyday lives, businesses have increasingly hired IT personnel to get their business online. This led to the dotcom phase, followed by the web apps phase and more recently we have the mobile apps phase. During all these phases, businesses have dictated the ways their digital interface would work. Now there would be more disruption and complete dismantling of how businesses use technology thanks to the advent of data insights provided by newer technologies such as Big Data, IoT devices, Cloud and AI frameworks.

In this article, we will take a look at insurance domain and how these technologies will dictate the way we re-imagine the business process in the sector.

Insurance domain can be broadly categorized into individual insurance, personal asset insurance and company insurance. For each of these insurance types, traditionally insurance companies have conducted preliminary checks, prepared a fitness report, agreed upon a premium and finalized the insurance. Once the insurance is taken, the insurance companies move on to next customer without any re-checks on the existing insurance holders, till the point of a claim being raised. This has led to following recurring issues:

  • Faulty insurance claim (by cheaters)
  • Not able to predict the extent of claims which can come in near future
  • Market segment challenges and in-ability to tap new opportunities, such as cyber-insurance

Let us take a look at how technologies such as IoT devices (smart wearables) , Cloud and Data Analytics can help mitigate the above risks.

Individual Insurance

Insurance companies can tie up with smart wearable companies and provide them to their customers, with an incentive of reduced insurance premium on usage and data sharing. Using data from smart wearables, insurance companies would know travel patterns, weather conditions, customer lifestyle, health habits and be a pro-active advisor to customer for changes to ensure better health.

Let us consider a customer who has unhealthy food habits, not burning enough calories and commuting to work at high risk speeds. This data, when provided to insurance companies by the smart wearables# connected to cloud and churned using analytical tools would give better insights. These insights would be used by insurance companies to subtly connect the customer with a nutritionist or give gym discounts or provide alternative safe travel approaches. The insurance companies, which without being intrusive, provides a better lifestyle will gain customer loyalty, better insight on customer habits with similar lifestyle and reduced insurance claims.

IOT in Insurance

Personal Asset Insurance

Depending on the personal asset being insured-be it house, vehicle, gadgets, etc., an IoT device could be suggested, in exchange for reduced insurance premium, which could monitor readings from sensors or smart devices and share data with the insurance companies.

  • Home Insurance – Data from smoke detector or water pipe sensors or temperature device would keep insurers can be informed about anomalies noticed and remediation, this will potentially help avoid any damage and lesser insurance claims.
  • Car Insurance – Data from sensors on various mechanical elements such as engine or coolant etc., will notify insurers whenever there is a need for repairs or maintenance. Also, recording the speed will help insurance companies to understand the risk profile of their customers and in turn provide remediation and reduce claims.

Company Insurance

Placing IoT devices on high-value machines can help identify snags and maintenance needs. In addition, usage of open data on weather, political unrest or natural calamity warnings could allow insurance companies to warn the organisations insured to put in place necessary mitigation plans to ensure minimal loss.

Orion has been a pioneer in re-imagining how new trends in IT can bring a business change. Our strength lies in partnering with IoT device makers, data synchronization over cloud, applying AI or Machine learning and providing rich data visualizations which can drive the business changes. Connect with us and see how we can help you transform your business for a better and profitable future.

References

# https://www.forbes.com/sites/parmyolson/2014/06/19/wearable-tech-health-insurance/#5eedaf2918bd
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Kunal Kumar Shah

Kunal Kumar Shah

Delivery Manager

Kunal is currently managing client relationships as a delivery manager for Orion. He holds extensive experience in system architecture, design and development of applications in Microsoft Technologies. He was part of the core team instrumental in setting up the German operations for Orion. In his decade long stint, Kunal has donned several hats to support the organization growth in areas such as business analysis, enterprise strategy and execution, RFQ/RFP submission, employee training and implementation of exponential technologies. He has deep domain experience in e-Commerce, BFSI, retail and telecom industries.

Kunal holds an engineering degree in computer science from Andhra University, India and has worked with few leading IT company focused on manufacturing, finance and retail domains. He is passionate about reading autobiographies and is a regular speaker at local tech meetups.

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