How can insurers plug into the Internet of Things?
I recently attended the Insurance Telematics event in Chicago, Illinois, and had the opportunity to learn about the latest trends and offerings in the world of the Internet of Things for insurance business intelligence. After listening to and seeing the different vendor propositions on the exhibit floor, I was surprised at how many vendors at this packed industry event were offering very specific point solutions. Each of these solutions solved only part of the Internet of Things puzzle.
While the industry is focused on usage-based insurance (UBI) and automobile driver behavior, almost all these vendor point solutions merely provide devices that collect data from either an onboard diagnostics port or a mobile app that captures trip segment information. Some collect some basic context data, but not the complete view of external influences affecting the data. For example, is it sunny, raining or snowing? And how is the weather affecting the driving data that insurers receive? Are insurers alerting customers about evolving weather patterns and calculating risk exposure in times of severe weather? These alerts are the types of value-added services and process optimization capabilities that IBM can offer insurers.
Innovative scalability and flexibility
Moreover, these point solutions leave the other aspects of insurance from connected homes and connected lifestyles out of the equation. This oversight is a missed opportunity for insurers to create new streams of revenue that can help them stand out and succeed in the highly competitive insurance industry. Some may see point solutions as taking a beginning step, helping companies crawl before they run. But the problem with implementing point solutions is that they do not provide the scalability insurers need as they grow and expand into other Internet of Things implementations for insurance.
The real need in the insurance industry is for a robust Internet of Things platform that supports a two-sided business model and allows for a high level of control and flexibility for innovative services and experiences. IBM has created a comprehensive solution for the Internet of Things ecosystem. It provides an end-to-end platform that is compatible with sources of data such as telematics, weather, social media, behavior, geospatial positioning, mobile and Time Series Portal (TSP) data, to name just a few. The Internet of Things platform offered by IBM helps bring solutions together from multiple vendors across heterogeneous environments. It delivers the insights that enable organizations to reduce utility costs, optimize compliance and exceed customer expectations. In addition, IBM offers exceptional levels of privacy and security.
Sharable weather data
IBM is well positioned to serve the needs of insurance organizations to leverage Internet of Things data. For example, IBM and The Weather Company recently announced a strategic alliance to bring real-time weather insights to businesses. Organizations can leverage this partnership to help improve operational performance and decision making. IBM and The Weather Company can help businesses understand how microweather forecasts impact the business, anticipate weather events precisely and take action to optimize those parts of their businesses most likely to be impacted. Businesses can also utilize forecasts that provide highly accurate and advanced warning of potential natural disasters caused by floods, hail, typhoons and other types of weather.
Businesses can use catastrophe insight and response from IBM to help them make plans. For example, insurance companies can plan for advance alerts and catastrophe response to provide a positive customer experience for their policyholders. The applications for insurance companies are clear. Data and insurance analytics from the partnership between IBM and The Weather Company allow insurers to handle the volume, velocity and variety of data needed to predict the severity of losses while providing insight into appropriate response tactics. Catastrophic events are key tests for insurers because the way in which insurers help policyholders prepare for and recover from a severe weather event remain top of mind for policyholders.
Integrated fabric of connected devices, people and processes
IBM sees the Internet of Things as an integrated fabric of devices, data, connections, processes and people that can transform the way we all do business. IBM is investing $3 billion dollars to help clients and ecosystem partners build Internet of Things solutions. And IBM partnerships such as those with The Weather Company and Twitter form the cornerstones of a strategy to help clients on the leading edge of burgeoning technologies. In addition, IBM has trained more than 2,000 consultants, researchers and developers on Internet of Things technologies, and has dozens of successful implementation projects. IBM is also expected to train at least 10,000 consultants on data services in the coming months, including 5,000 weather specialists. Organizations embarking on an Internet of Things journey need to think IBM.
Learn more about IBM industry-specific insurance analytics solutions, including the Internet of Things for insurance, and sign up to attend a live IBM Behavior Based Customer Insight for Insurance demo of a featured solution for customer retention, cross-sell and up-sell.