Insurance of Internet of Things anticipated to reach over $40 billion globally by 2022
The global insurance market covering the so-called Internet of Things (IoT) is estimated to be worth $42.76 billion by 2022, growing at a compound annual growth rate (CAGR) of 65.89 percent between 2016 and 2022, according to a report by Report Buyer.
A key driving factor for the growth of the market is the growing adoption of Internet of Things (IoT) for various insurance applications such as health, life, automobiles, travel, and agriculture sectors, among others, the report said. The IoT-enabled devices provide intelligent data for insurers to monitor and track the status and monitor data that helps insurers to manage claims and reduce risks.
Most of the automotive insurance industries offer usage-based insurance for drivers and car owners. The IoT-based devices such as in-vehicle sensors, global positioning systems, and other on-board devices generate informative data for insurance industry.
Data such as speed, acceleration, and distance driven is collected by insurers and is used to accurately access premium policies and reduce frauds. Additionally, the policyholders are able to get rewards for good driving behavior and improve the driving habits. Hence, IoT would be able to reduce the cost of premiums and strengthen customer relationships. The adoption of telematics in UBI enhances the underwriting process and speed up the insurance claim process.
The IoT insurance market is expected to grow at the highest CAGR between 2016 and 2022 owing to the increasing industrialization and urbanization in this region. The growing adoption of IoT devices such as smartphones, drones, and Wi-Fi dongles, among others in the Asia-Pacific region has increased the demand for IoT insurance in the region. The major investments in new innovations and IoT technologies in developing economies of APAC region drive the IoT insurance market.
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