A collaboration between insurers and IoT service providers is key to enable companies to interpret the huge amount of data available, model and price risks more accurately.
This is according to an introductory panel at the June 22 Verisk Risk Symposium in London, UK, presented by Mark Anquillare, chief operating officer of Verisk Analytics and Dawn Mortimer, assistant vice president of IoT/telematics at Verisk Insurance Solutions.
According to estimates, 8.4 million connected things will be in use worldwide in 2017, up 31 per cent from 2016 and will reach 20.4 million by 2020, Anquillare said.
“All of these connected devices, in homes and in cities, it’s going to change the way we all operate and the way we all think,” said Anquillare.
Over 75 percent of European insurers are investing in major modernization initiatives, according to Verisk research, rethinking work flows, data analytics and the handling of a policy.
And investment in AI and the IoT is increasing significantly, to almost $1.7 million in total, according to Accenture’s report, ‘The Risk of Insurtech 2016’.
Mortimer recommended the collaboration between insurers and IoT service providers to better understand the data in order price more appropriately.
An example of this was in cars connected through telematics. She stated that there are over 8.5 billion miles of vehicle data, and over 1.6 million drivers in the US.
And the data is pretty significant, she said, providing insurers with driving patterns behavior, such as when they drive and how they drive.
Metrics are published after each trip, and the system tells the driver how they drove and how they might improve. The driving scores then enable insurers to price more appropriately.
“The thing we’ve seen with insurers is getting the data is key. An exchange type model is critical for the future,” she said.
However, there are some challenges in this new emerging market, she said, not only when it comes to finding the right partners to collaborate with, but also the cyber security implications from the interconnectivity of devices which adds another risk layer.
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Verisk Analytics, IoT, Technology, Mark Anquillare, Motor, North America, UK