You may not have heard of #InsurTech yet, but you will. It’s currently a bit of a trendy buzzword, defined as technological innovations that provide savings and efficiencies to the insurance industry. InsurTech innovations are steadily on the rise and are projected to explode over the next five. In 2016, the global market size for underwriting improvements was reported at more than $110 billion; by 2020, it’ll be $175 billion.
InsurTech is a ‘catch all’ term that includes a variety of technological innovations, but the largest part of this growth is in Artificial Intelligence (AI) and the Internet of Things (IoT). Insurance Business’ December 2017 article, “Top Predictions for the Insurance Industry in 2018,” predominantly focuses on InsurTech – including IoT, data, and AI.
Here’s where this gets interesting: AI & IoT means significant improvements in the insurance space, particularly in the form of better risk protection, improved coverage, and savings for customers.
The collection of data is integral to the InsurTech space. While we can all agree that the insurance industry has relied on data collection since the very beginning (Actuaries were among the first mass data collectors), the concept of real-time or dynamic data collection is revolutionizing the industry.
Here’s how it works: Telematics data is collected in real time. In the auto insurance world, this may mean a device is placed inside your car that tracks your speed, acceleration, and the number of times you hit the brake. All data is collected in real-time and stored to provide your insurance company a better understanding of how you drive and the likelihood of getting into an accident. In the home insurance world, this may include sensors or systems that track energy, resources, or security.
A property owner’s biggest risk is water damage, which most homeowners do not realize – in fact, in Canada, a homeowner is 12 times more likely to face serious water damage to their home than a fire. Further, mold growth that results from unmitigated water damage is extremely dangerous to your family’s health.
IoT powered sensors and automatic water shutoff systems track a home’s water usage and, if an issue is detected, alert the homeowner via push notifications, email or text with the option of user directed remote shutoff. If alerts are ignored (as they often are), automatic shutoff is employed. The end result is water damage mitigation, which insurance companies have embraced and many now offer discounts to homeowners/building owners for installation.
While end users may be nervous with customer facing InsurTech innovations such as telematics, the reality is that these innovations provide them with greater control and lower rates. Of course, terrible drivers may naturally resist auto telematics devices, and we don’t blame them!
InsurTech innovations are game changers that create positive change for our oldest and most stable industry. They are the disruptors, the visionaries, the revolutionizers, and the creators, who have paved the way for this exciting #InsurTech space. We are honoured to be a part of this community and cannot wait for the future of the InsurTech movement.
Guest article written by: Shkya Ghanbarian Shkya Ghanbarian is the Director of Sales and Growth Strategy at Eddy Home, specializing in the InsurTech industry. She has worked with hundreds of Canadian insurance brokers and companies on Eddy’s smart home water monitoring solution.