The role technology plays in an individual’s life is rapidly growing and individuals are becoming more dependent on it – from tracking steps to monitoring heart rate are now part of a daily ritual. Wearable devices have steadily become a have-to-have accessory thanks to their dependability and versatility.
“The wearables market grew from 24 Billion USD in 2019 to 81 Billion in 2020, driven by the Covid-19 pandemic and the realisation that a healthy lifestyle is essential,” says
Harkrishan Singh, Director of Application Development at AlphaCodes. According to Singh insurance companies can tap into this market, aligning the Internet of Things (IoT) with their business needs. “They can also use wearables to reward people for maintaining a healthy lifestyle, which in turn will benefit them through reduced claims.”
Singh points out that IoT devices can help insurers in many areas. “For example, they can track real-time data related to cargo, vehicles, vitals and personal health. Anomalies can be flagged immediately for action, to prevent theft, address risky behaviour or alert people to potential health problems. Commercial and Residential Real estate insurance companies can leverage Smart Home devices, HVAC monitoring, IoT enabled sensors and thermostats to manage fire and safety or property damages.”
According to Singh there are various technologies available for different insurance industries. In the medical space, fitness trackers, ECG monitors, pulse oxygen monitors and blood pressure monitors can be used to collect data and alert to potential health problems. In the automobile industry, telematics devices or On-Board Diagnostic (OBD-II) dongles can be used to monitor vehicle health and also driving behaviour. Trackers can be used in cargo and logistics to reduce theft.
“Technology underpins many applications for the broader insurance sector and collected data can be used to more accurately calculate risk and investigate claims. This not only helps insurers to more effectively determine appropriate premiums, it improves safety and helps in reducing the amount of fraud.”
Singh points out that one of the key takeaways is that IoT devices provide data that can be analysed for improved insight. “This means that premiums can be tailored more precisely to individual clients, rather than using a blanket approach to risk. IoT is disrupting the traditional insurance business model, and the pandemic has brought the benefits of this to the fore. Insurers need to embrace these technologies and use them as points of differentiation, helping them to attract and retain customers in a highly competitive market.”
The South African insurance industry has certainly embraced the benefits outlined above, and healthy competition will keep raising the bar.