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Insurance & the IoT–the Good, the Bad, and the Trailblazers

August 27, 2020

For many of us, grasping the rather intangible concept of the Internet of Things (IoT) can be challenging. A simplistic explanation is that the IoT is everything connected to the internet. But, more and more, it is also being used to define objects that "talk" to each other, everything from simple sensors to smartphones and wearables that are connected to each other.1 The concept of being able to connect to anything at any time is continuing to drive industry changes as markets develop processes and create products to keep pace with emerging technologies. The insurance industry is no exception. And while it can be daunting to adjust to cultural shifts, the time to transform is now. What does this transformation look like? And what will the IoT mean for insurance companies?

We’re glad you asked.

The Good

Traditionally, insurers have had to rely on historical data and customer reports to calculate risks and determine prices. Web-connected devices now allow the industry to more effectively measure and manage risk.2 Leveraging the power of the IoT gives insurers the ability to collect personal data in real-time, which can result in improved accuracy, reduced costs for both the customer and insurer, and increased fraud prevention.3 The good news for insurers is that many customers are ready to provide this information, if it lowers their premiums.4 Further, the ability to archive and retrieve important documents in a digital format means insurers can more efficiently access and review records online or quickly produce print-ready files, allowing agents to send policy statements, invoices, and other documents with ease.

As consumers grow accustomed to having preferred payment options available at their fingertips, insurance companies have answered the call of convenience by providing additional billing and payment solutions. Policyholders expect to be able to view and pay their premiums by mail, in person, over the phone, online, via email, by text message, or with a native mobile app and insurers that are delivering on this expectation are getting a leg up on their competition by improving customer experience and building a loyal customer base. Mobile apps also provide insurance companies the ability to give customers instant access to policy information and tools for submitting and managing claims. Carriers can improve both TCPA compliance and customer satisfaction by communicating with policyholders in their channel of choice. Partnerships between insurance carriers and communication providers like KUBRA mean that today’s carriers and policyholders can communicate faster and more clearly than ever before.

The Bad

The industry has long since been known for its reliance on paper documents and moving away from that has proven difficult with a whopping 9/10 insurance companies indicating they’re struggling to transition to online-only, according to McKinsey. Though the struggle to adapt old legacy systems is real, the fact that 61% of customers say they prefer to check their applications online5, means insurers need to tackle this seemingly arduous task if they want to improve customer satisfaction. Consumers have high standards and expect modern processes across industries, regardless of the various constraints a particular industry might have. Insurance companies are no stranger to falling short when it comes to meeting the growing expectations of its customers. Agencies are increasingly faced with the threat of outdated practices and under-informed policyholders. Without a dedicated investment to innovation and the establishment of successful partnerships, both insurance providers and consumers will remain subject to the growing pains.

The Trailblazers

All things considered, the future of insurance and the IoT is exciting and something to look forward to. In the past few years, pivotal advancements in customer communications have included:

  • Agent/carrier alerts such as storm, incident, or claim updates from environmental sensors or back-office systems.
  • Customer alerts warning of storms and incidents such as wildfires, heavy rain, high winds, tornados, and hurricanes can be pushed to smart phones and devices.
  • Improved claims processing from map-based claims and photo reporting allows for a faster estimation of losses, quicker response times, and a more effective deployment of field adjusters and improved customer contact and outreach.6
  • Artificial Intelligence is allowing customers to use their smart speakers to access policy information, check the status of a claim, and make payments using voice-activated commands.

The Future

Improving current industry functions and creating new solutions will allow carriers not only to keep pace with client expectations and tech trends, but also to define new ways to deliver customer-centric care to policyholders while reducing costs for providers. Many of these technologies have been rolled out by motivated insurance companies that understood the benefits of being the first to implement them. While there remains much in question for the future of insurance, it is undeniable that if carriers rise to the challenges ahead, a more efficient and collaborative network awaits.

Looking at the good, the bad, and the trailblazers of insurance, it’s clear that providers are on the precipice of great challenge and transformation. Consulting services provider Mercer suggests one of the greatest challenges facing the industry is turning the promise of new technology and big data into commercial successes. This includes capitalizing on the opportunities in mobile and web-based services, using big data and predictive analytics effectively, and overcoming the problems associated with legacy technologies.7 While some are succeeding in this area, these advances are a tall order for others. Nonetheless, they’re not left solely to their own devices. PwC reports that most insurers are looking outside the industry for the best ways to improve their systems, processes, and products.8 Third-party solution providers like KUBRA offer insurance agencies help with processing payments, policyholder communications, marketing services, and document archival and retrieval. Together with effective partnerships, creativity, and a focus on the consumer, the insurance industry can look forward to finding its place within the realm of the IoT.


1 Oliver Ralph, Insurance sector prepares for disruption, Financial Times, October 22, 2019.
2 Ibid.
3 Ben Dickson, 3 ways the IoT is disrupting insurance, The Next Web, March 25, 2020.
4 Insurance Technology: 11 Disruptive Ideas to Transform Traditional Insurance Company with Machine Learning, APIs, Blockchain, and Telematics, Altexsoft, June 15, 2018.
 5 Ibid. 6 P&C Insurance: Delivering the Promise, Canadian Underwriter.
7 Business and Workforce Challenges in the Global Insurance Industry, Mercer.
8 Top Issues - Insurance, PWC, 2017.

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