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How IoT can improve risk management for insurers
While the insurance industry has traditionally been driven by vehicle theft to embrace telemetry, the time has come to utilise the Internet of Things (IoT) for relevance in the digital age.
South Africa has a very mature telemetry industry thanks, in part, to the high risks people face around theft. The skills we have here means insurers are looking at new ways of customising solutions to benefit their customers in a more meaningful manner. Enter IoT.
Increased, relevant real-time data
This promises much more than just monitoring the location of a vehicle, the temperature of its load, and the performance of a driver. By equipping a business with more sensors and devices linked to the internet, insurers and their customers are able to gather significantly more real-time data to drive business benefit. This also has a big impact on managing risks.
This gives decision-makers the ability to spot trends, adapt to changing market conditions, and improve their strategies.
For example, when portable toilets get dropped off, there is often not a physical address to use. This creates complications when another driver or team has to find the units a few days later for cleaning and maintenance. Using internet-linked sensors, the provider can easily find the toilet and massively improve operational efficiencies.
What is more, IoT can be applied to any business whether that is a construction company, a retailer, or even a startup. Essentially, it boils down to introducing a layer of technology on top of the business. Operations do not have to be reinvented.
Improved risk management for insurers
For insurers who are focused on managing risks, this provides an indispensable tool in the real-time business landscape.
An insurance company can now be more actively involved in managing risk. We have seen seen companies monitoring how clients drive and rewarding them accordingly. The same goes for people wearing fitness devices. The next frontier is to ask: How can we apply the same concept to other insurance risks? IoT technology is something that can be applied on both a consumer level and a business one.
Another example is using IoT at a construction company to assist in tagging assets with Radio Frequency Identification (RFID) tags. This assists with monitoring everything from the service intervals on equipment like cranes to ensuring that generators have the correct fuel levels. Again, an insurance company whose job it is to manage risk, can now be empowered to customise offerings much better to assist corporate clients across industries.
In the retail environment, shopping centre management can use IoT to ensure the water pressure fed into the fire system is correct in order to control a fire. This reduces the hassle and time of monthly maintenance and gives them the peace of mind that water will work in the event of a crisis.
IoT is a great enabling technology that takes insurance companies and their customers into the digital age. By improving business efficiencies and reducing costs by mitigating risks, insurers can be much more flexible in their approaches than in the past.