Insurers need to conduct cost analysis on Internet of Things

Insurers exploring the possible benefits of the Internet of Things (IoT) will need to carry out careful cost analysis, according to Microsoft’s Tony Jacob.

The managing director of worldwide insurance at the tech giant said insurers would need to determine the right business models to take advantage of this technology trend.

Jacob said that Microsoft had seen an increasing number of insurers looking to see how the IoT could provide data and insights into consumer behaviour.

He added that this could help with new product development, risk identification and pricing, and even new value-added services that support policyholder retention.

“We’re seeing increasing interest among insurance carriers in the smart home or smart facility type of opportunity, where a growing collection of home automation devices, from internet cameras and motion sensors to gas and water leak detectors, are providing data and insights,” he said.

“These can inform insurance products as well as value-added services that help shift the conversation from insurance to protection.

“This can be an interesting proposition for carriers, but in these early days of the Internet of Things, many carriers want to better understand what is possible, based on better insight into the type of home or building automation devices that are available or being developed for the market.”