It’s been said that the internet of things will revolutionise the insurance industry. It certainly has the potential to transform healthcare, improve road safety and make people’s homes more secure.
In every one of these areas, technology will allow insurers to calculate risk more accurately, charge for insurance more fairly and reward positive customer behaviour.
In the process, we’ll play our part in encouraging and enabling people to look after themselves, their loved ones and their prized possessions in new and better ways.
For me, healthcare is the big one – not least because it’s where the positive impact on people’s lives will be the greatest. Personal healthcare is one of the early beneficiaries of wearable devices, and we are currently trialling a health-tracking programme using Fitbits with a select customer group. So, sensible exercise may quickly become one of the positive behaviours we can reward.
A revolution? In technology, for sure. In insurance, it’s more of a rapid evolution.
The technology exists to guide dietary choices and identify environmental risks to health, too. Spectrometers that scan food, walls or carpets for allergens will help relieve suffering among those with particular sensitivities, but also have the potential to help everyone keep a check on what they’re putting in their bodies. Again, insurers can track positive behaviour and reward it. Far more importantly, so too can doctors.
Driving is another area in which solutions have already been implemented. Our own Aviva Drive app allows a smartphone to monitor driving behaviour and tailor the car insurance premium accordingly. As cars themselves become connected, such data will occur naturally, and we will be in a position to reward safe driving at both a personal and fleet level.
Finally, there is the area of the connected home: smart locks, smoke alarms and – most significant of all when it comes to insurance claim volumes – water-detectors. Such devices will not only provide people with peace of mind, but also enable preventative action and fast response in the event of trouble. All this will make for fewer and lower claims, which will, in turn, lead to lower premiums.
So, a revolution? In technology, for sure. In insurance, it’s more of a rapid evolution. Certainly, at Aviva, we already use data to recognise our customers’ individual circumstances and reflect this in our pricing – to the extent that we can.
In the future, we should be able to do this with ease, to the benefit of our customers – which, in turn, benefits our business and shareholders.