According to a Lloyd's research paper, the Internet of Things (IoT) may drive innovation in insurance value chain, including the claims settlement process.
The paper, titled "Networked World: Risks and Opportunities in the Internet of Things," examines the IOT's influence on the insurance industry.
Lloyd's created it in collaboration with UCL's Department of Science, Technology, Engineering, and Public Policy (STEaPP) and the PETRAS Internet of Things Research Hub.
The Benefits of an IoT Insurance Industry
According to the report, IoT insurance will help gather and handle more data, resulting in improved risk assessment and the development of more flexible, customized, and real-time solutions.
With the rising use of IoT, interconnection will rise, leading to the development of business models in which more information about insureds is available.
Furthermore, it will aid in the generation of customised policies in real-time, as well as the detection of fraudulent claims.
According to the paper, the capacity to offer personalized insurance policies will also allow insurers to more precisely identify and mitigate risks.
However, the research noted that the technology might raise policyholders' concerns about the usage and veracity of their data.
As IoT becomes increasingly prevalent in more sectors of life, new sorts of dangers will arise, increasing the pressure on insurers to launch new policies and services.