Iot is undoubtedly among the top ten technology trends that will be transformative and disruptive to business models. With an estimated 50 billion IoT sensors by 2020, huge amounts of data can be collected that will enable businesses to extract information and extremely valuable insight. As the demand grows for IoT, so does the network of connected objects. It is important to remember that IoT devices not only communicate with the network they are connected to but to each other as well, creating one big interconnected “device mesh”, working in eco-systems to enable smart homes, smart buildings, smart factories, and ultimately smart cities. Gartner states that using IoT opens up opportunities for businesses to gain $4 trillion in revenue by 2020 which will be the catalyst to transform many businesses. Having said that, to-date just over one in five respondents to the IoT Business Index survey report (The Economist) that the IoT has had a “major” impact on their industry, so there is some way to go before maturity.
"IoT can help provide a better journey and outcomes for the customer as well as improve productivity and lower the cost of delivery for businesses"
Various industries will benefit from IoT. However, the industrial sector will probably benefit the most. IoT will feature heavily in ADAS (Advanced Driver Assistance System) and driverless vehicles which are expected to become mainstream in the next decade or so. IoT has already been deployed to deliver better reliability and efficiencies to optimize how jet engines and other such machinery with hundreds and thousands of sensors deployed, provide real-time data back to base, for monitoring and analysis. Another example is advanced innovations in lighting sensor technology, adapting to the different ways that space is used providing smart space and at the same time opening up new possibilities in preventative maintenance, remote diagnostics and reducing lighting costs. IoT also features in farming, healthcare, and insurance amongst other sectors.
Customer centricity is a key focus within the insurance industry and focusing on the customer value life cycle helps achieve this. This lifecycle is made up of three main sections: Data sensing & collecting, Data analytics, and Human value. The process starts with an IoT device which is connected to the internet and has user interaction; the interaction is then captured by the business and stored as data which will be later used to create and derive immeasurable value and insight through analytics, helping us to deliver customer value which can be targeted to individuals or organizations.
In order for IoT to be effective for a given sector or eco-system, it is important to select the correct devices for the right purpose. Careful consideration should be given to the type of sensors and data collection (volume and frequency) and analytics capabilities used when considering sensors from IoT devices, as these effectively provide us with the insight that expands our knowledge of a given situation. This data issue has been the biggest challenge for the wider scale adoption and realization of the full potential of IoT so far. This is driving the thinking towards the use of edge computing to process, analyse, and filter the data locally before sending only the information that matters back to base.
IoT can help provide a better journey and outcomes for the customer as well as improve productivity and lower the cost of delivery for businesses. Using IoT will allow businesses to produce real-time predictive analytics. An example of this is the creation of urban systems that have been set up to detect traffic congestion and accidents, consequently sending new instructions to city light grids and alerts to commuters, optimizing the transportation flow. Another way IoT is adding to human value is through the shift in product portfolio, so instead of being reactive businesses (dealing with events after they occur) they are developing more of a predictive model when it comes to equipment and machinery to focus on prevention. As businesses become more proactive, the risk of incidents are likely to reduce which in turn reduces the number of claims made and their severity, which directly relates to the insurance industry.
There are a wide variety of IoT devices that help adapt and expand the insurance market. Applications range from using IoT to manage and monitor various parameters in cars or motor fleets remotely for operations and maintenance but also using real-time video footage that captures accidents providing factual evidence. Smart devices can capture and detect security breaches in buildings and also monitor in real-time energy use, health check boiler and water pipes to deflect any potential failures before they arise. This reduces and mitigates risk or prevents damage, therefore, allowing customers to have peace of mind and for the insurance company to add value to their proposition. The virtual assistant is an IoT device that will also assist the insurance industry as customers can use their smartphones to remotely control their cars, homes, etc. or by using voice recognition, get relevant advice through improved customer service or identify and get a quote and buy certain products with ease. Telematics is yet another way in which IoT already delivers value for young drivers insurance and also for commercial policyholders where IoT driven by sensors can call for help when the driver is unable to doing so. This is done through the cigarette lighter, which has built-in crash sensors and an accident report connector. This connector communicates with an accident report app on the driver’s smartphone using Bluetooth.
We are seeing more and more sectors starting to identify with ways to integrate the Internet of Things into the way they work with significant investment. By using this, it can unlock data potential and provide customers with benefits such as speed to market, insurers by providing better service and the market by staying competitive. Despite these benefits, there are also challenges. However, the benefits and opportunities that can be realized will outweigh the challenges faced. We are currently at the peak of the Hype Cycle, and over the next five years IoT will continue to mature, may well metamorphosis and be subsumed by wider eco-systems or edge computing.