Report from the IoT Insurance Summit in Chicago
Last week, the TIBCO Insurance team attended the Nexus IoT Insurance Summit in Chicago to showcase our Insurance Pricing Accelerator that takes a new approach to ratemaking and pricing. Attendance to the show seems to have doubled since last year, indicating that the IoT market is still growing at a healthy rate.
General observations
The highest level of interest seemed to lie with telematics solutions around commercial lines insurance, particularly in the categories of commercial office buildings, hotels, schools and condominium buildings. It seems that monitoring all aspects of a commercial property’s infrastructure, such as heating, ventilation, elevators, water distribution, power distribution and security, to proactively detect risk is a really hot space in the IoT world right now. Basically, insurance companies want properties to monitor and prevent any incidents (e.g., a boiler overheating, carbon monoxide poisoning, etc.) and are looking to encourage more property holders to do so by offering discounted premiums. To that end, there were several vendors exhibiting smart water valves and other devices that can be retrofitted into the existing infrastructure of a building. It will be interesting to watch how this space evolves over time.
Residential telematics/IoT
Another hot topic was telematics in residential homes. We had an interesting debate around how much data people were willing to surrender about what’s going on in their house to receive a discount on their home insurance. I asked myself: “Am I willing to allow monitoring of all my personal data to get a dollar off my home insurance policy?” Probably not, as it means surrendering part of my data privacy. And, my home insurance payment is so small anyway, the savings wouldn’t be enough to balance out the loss of privacy. But we’ll see how that shapes up.
Debate aside, there really are no telematics monitoring solutions of homes available yet. There are isolated technologies like Nest that will detect if your house is flooding and send you an alert. But there’s no comprehensive home telematic monitoring system available yet on the market. Again, it will be interesting to watch how this takes shape in the future.
Automotive telematics/IoT
There weren’t as many solutions on display related to automotive telematics as we expected. We attribute this to current limitations with respect to measuring driver behavior (use of phone, driving aggressiveness, distractions etc.) and the difficulty of finding the safest possible solution to providing feedback to a driver. For instance, do you really want to send an already distracted driver a video or audio alert to their phone that distracts them further?
After attending the show, it seems clear that there’s lots of innovation and experimentation bubbling away in IoT usage, both device-based and software-based with many new entrants to the market. There were a lot of interesting ideas and people walking around looking for ideas, but the market hasn’t taken shape yet. No clear technology leaders have emerged as of yet. It seems like the space isn’t quite mature. Established vendors are trying new things and there are a number of start-ups. After a while in a new space like this, there tends to be a dominant vendor, like Amazon for online selling, but in the IoT in insurance space, there are no clear leaders yet. Seems like the space has great potential but it’s gonna be awhile.
Stay tuned.
Check out TIBCO’s Insurance Pricing Accelerator that we showed at the event.