As we have discussed on our other posts about IoT in the insurance industry and the Internet of Insurance, the insurance industry is known for being slow to change. Many industries get stuck in doing things the old way and are reluctant to change because they are still working good enough and they are still making money.
However, as with all things, companies must change, progress, and advance as the world in which they live continuously advances. Over the last five years or so, the insurance industry has been forced to change in many ways and that includes using technology more and incorporating IoT-based systems to help them improve their services.
Of course, with an industry that has trouble with progressing into our modern world, they have faced many a challenge when switching over to a more technical IoT based insurance practices.
In this post, we will take a further look into the top three biggest challenges that insurance companies have when integrating IoT into the businesses.
Insurance companies will need to change some of their business models and practices if they wish to incorporate IoT-based solutions into their insurance policies. Currently, insurance plans are largely based on medical conditions, age, gender, etc., and are not very personalized and tailored to individual people.
IoT solutions would force insurance companies to make their plans more personalized if they want to have success with the incorporation of IoT. For instance, car insurance companies now have the ability to monitor your driving if you so choose and are looking for potentially lower rates on your car insurance policy. This is great for people who are good drivers, but those who do not have a certain level of skill will be more heavily penalized for their driving skills. This could open up the door for many issues and the need for government intervention may rise.
Fraud and Securing Data Safely
Although the internet is a wonderful thing, it also opens up more opportunity for cyberattackers to steal information for malicious intent. The sheer amount of personal information that home insurance, car insurance, life insurance, and health insurance may collect will be staggering. That information would be of insurmountable value to a cyberattackers, so securing data so it is 100% safe will present challenges.
Therefore, insurance companies will have to up their budgets on data security or even introduce a completely new set of workers just to solely handle the possible attacks and threats that will happen when IoT is more proactively introduced into insurance companies.
As with most digital information stored on the Cloud or servers, privacy becomes an issue. One of the biggest issues surrounding privacy is the debate about who really owns all of the data that is collected from people’s smart devices, homes, cars, fitness bands, and more. Does the company that makes the device or product own that information or does it belong the insurance companies who are collecting certain data for their own use and benefit?
Although the answer is still not completely clear, more boundaries and firmly deciding who actually owns the rights and is responsible for this data and information will help define clear lines so privacy becomes less of an issue.
Privacy also play right into data security. People who have insurance plans that use IoT-based solutions will want to be assured that their information is in safe hands and not at all subject to anyone else getting their hand on their private information.
There is still a lot of work to be done and a lot to improve when it comes to data security and privacy. We will most likely see government regulations build in an effort to reduce privacy issues and keep people and companies safe and secure.