The Potential Of IoT In The Indian Insurance Industry!
IoT has the potential of generating products specifically conceived for individual requirements.
The Internet of Things or IoT created anticipation among enthusiasts right from the initial announcement of the concept. A huge network of things, digitally accessible, kindled intrigue almost immediately. This has opened doors to a host of technological advancements with regards to the insurance sector in India as well.
It is an open secret that Internet of Things has the potential of generating products specifically conceived for individual requirements. This is possible with the help of raw data collected through an array of interlinked devices.
India has a flourishing economy with a number of small scale entrepreneurs in the country. With opportunities booming since internet catapulted about two decades ago, many enthusiasts are willing to engage in futuristic technologies like IoT, for which the insurance industry is not an exception.
We have moved on from the times where the approach of Gen X was to heavily rely on the expertise of insurance agents for getting their assets insured. This is not the case with millennials, they are a tech-savvy group of individuals who have technology at their disposal, this leads to accurate decision-making powers.
Catering to this change, the use of IoT is an epitome of how personalized an auto insurance product could be. This technology is a breakthrough in designing User Based Insurance models.
The integration of IoT for telematic systems, helps insurers to accurately map the location and speed of a specific vehicle, offering constant real-time data. From the analysis conducted on this data, insurers can track precise driving patterns for better assessment and segmentation of customers into risk groups.
Indian insurers who will be investing in IoT devices, will enable them to yield superior results in terms of designing policies. This will help eliminate the reliance on risk analysis conducted through observation, over the past years. It had led to a generalized policy structure.
Determining the cost of an insurance policy, created according to individual driving patterns, will be an effortless practice with IoT. It will commence an era of accurately customized products, thus allowing insurers to obliterate universal policy design in the country.
Risks Posed By IoT
With respect to the automobile insurance industry, IoT devices are capable of delivering enormous amount of data, basically targeted towards the assessment of driving patterns as mentioned earlier.
Without impeccable safety measures, this data could be exposed to erroneous sources leading to the breach of security, which may arise with the use of technological loop-holes like reverse-engineering. The nature of this data being delicate, private and significant must be exclusive for legitimate candidates.
Creation of topnotch security devices, for insulating the sensitivity of data delivered by IoT, is impending. Until then, gearing up to avoid the perforation of security and a wave of attacks would be essential.
Future Of Indian Insurance Tech Space
IoT fueled with fintech is anticipated to revolutionize the face of Indian insurance industry. If business models are designed with enough precision, the result should be a lucrative affair.
Simultaneously, it is of utmost importance that the fine line between the benefits of technology and privacy of consumers is perceived.
For instance, tracking the locations visited by a specific vehicle may add to the assessment of a driver’s behavior for creating a customized policy. However, this person may not be willing to declare such kind of sensitive information on daily basis, even if it might yield a lower premium.
What Lies Ahead?
A long term profitable business, can be attained by being transparent about the objective behind the use of personal data collected through IoT devices.
We at Acko believe that Being transparent and technology driven could create confidence among consumers who will in the long run come forward and contribute information for creating customized auto insurance policies. This will in-turn lead to a nation which is technologically advance, rich with security & safety features and filled to the brim with scope for innovation.
About The Author: Varun Dua is the founder and CEO of Acko General Insurance and was a co-founder of Coverfox Insurance and has brought in good technology practices to the Insurance industry in India.