IDC research suggests that the Internet of Things market will be worth $1.7 trillion by 2020 as businesses figure out how to use cheap, connected sensors to drive growth. The InsureTech industry has already started to make some tentative steps into the IoT arena – Aviva’s Drive app is one example of how to collect, analyse and apply customer data effectively for instance.
The rest of the insurance industry is still grappling with IoT however – most are unsure whether connected sensors even have a part to play in the future of their businesses. Of 300 insurers questioned by FC Business Intelligence, just 3.4% were actually using IoT in a production application.
Where do InsureTech marketers come in?
When asked to predict the future of the insurance sector and IoT applications, nearly one-fifth of commentators claimed that the technology would be of most value to underwriting departments. Applications like Aviva Drive will allow underwriters to access raw data from individuals, allowing them to create highly accurate, personalised policies.
More interesting to marketers however was the discovery that 10% of InsureTech specialists expect IoT to be of greatest value to the marketing department. This was well ahead of more traditional business units like Fraud, Strategy, Digital and even Pricing.
Although the FC Business Intelligence research does not elaborate on why so many experts expect this to be the case, it is possible to have an educated guess. Rather than using IoT to collect general data for detecting fraudulent claims, the implication is that marketers will be able to gain a better understanding of customers and their preferences from IoT sensors, allowing them to tailor their campaigns for greater success.
Marketers can take the lead
For years marketers have been using technology to better understand customers, so the addition of IoT to existing data collection and analysis provisions should be relatively straightforward. And in true marketing tradition, they will be able to show other business units how IoT “works”, rather than simply tell them.
The fully-extensible nature of modern IoT technologies means that insurers will be able to add to their infrastructure as other use cases are established and programmes come on stream.
As the majority of insurers hold back waiting for IoT to establish itself in their industry, early adopters are stealing a march on their competitors. Which is where forward-thinking marketers can provide the initial use case required to kick-start an IoT project; without internal impetus, some insurers may find they are left behind, ceding many of the available opportunities and market share before they even start.
So does the future of InsureTech and IoT rest in the hands of marketers? Probably not, but they will still play an important role in proving the value of the technology, and sharing their analytical experience to help develop new products and services using Big Data. Which means marketing to colleagues as well as prospects.