The insurance industry trails other sectors in effectively harnessing new data sources such as the Internet of Things, or IoT, and may have a harder time keeping pace with customer demand and achieving competitive advantage, according to a recent survey from LexisNexis.
“Carriers already use data to make better decisions. But given the looming tsunami of data from the Internet of Things, we were surprised to learn how few are prepared to leverage it into their business strategies and customer offerings,” said Bill Madison, CEO of insurance for LexisNexis Risks Solutions. “The good news is that the IoT playing field is currently relatively even. Partnering with an experienced organization to cleanse, normalize and analyze IoT data can help carriers gain a first-mover advantage in enhancing their existing portfolio and developing new products.”
The survey revealed just two out of 10 insurers collect data from telematics, wearable’s, connected devices and connected buildings, and only 5 percent of those collecting data use it strategically. LexisNexis surveyed personal and commercial carriers and found the personal lines side currently makes better use of telematics and connected-home data (up to 24 percent of respondents collect data), compared to only 6 percent of commercial insurers.