How the IoT and 5G Connectivity is Transforming Insurtech

Chris Gill is the Director of Risk and Insurance Markets, for Over-C - the UK-based insurtech that specialises in data sources and analytics solutions . He is passionate about data, analytics, and IoT connected technologies and they way they are transforming how we understand and manage risk - especially in the insurance sector. He is also the former Head of Risk Solutions at QBE and specialises in IOT software for digital transformation, connected risk management, and digital partnerships. We caught up with him to find out just how much the IoT and greater connectivity will change insurtech in the near future. 

Q: How much are IoT devices influencing events in the insurtech sector - and which areas have seen the biggest uptake? 

IoT is certainly nothing new, but although it’s been around in one form or another since the 1980s. We’re at a point in time now where almost all industries use IoT to some degree, with connected smart environments capturing huge amounts of real-time data. Despite the obvious benefits of real-time data in insurance, the commercial Casualty andProperty insurance lines in particular still heavilyrely on static risk factors when selecting and pricing insurance policies. There is now a swell of excitement across the global insurance market about the possibilities unlocked by IoT and customers dynamic risk data, but uptake remains slow across the board.

Q: What are the biggest challenges faced by insurtechs in terms of managing the data they collect, and why?

I would say that the biggest challenge faced by the insurance industry when it comes to digitalisation in general is the lack of a tech minded talent pool. Recently, some of the biggest insurance firms have been looking to the tech sector to hire innovators to help modernise systems and processes for the digital age, but there isn’t a ready-built pool of insurtech experts per se. It’s critical that the insurance world shifts its culture to become more digitally savvy in order to reap the benefits of proper IoT utilisation.

Q: What impact will 5G have on insurtechs as it becomes a mainstream service? Will they end up with more data than they can handle?

The infrastructure to collect and analyse data is actually already there, and 5G only really serves to enhance current data processes rather than transform them. The insurance industry should be focussed on improving the foundations of their data operations by improving areas such as data governance instead of relying on shiny new things like 5G. bottom line: 5G will be a nice boost to digital operations in the insurance sector, but the industry can’t kid itself that it hasn’t got a lot of work to do on its foundational data processes before reaping the benefits of 5G.

Q: From a security perspective, what should insurtechs be doing to protect themselves and customers from this increased number of device usage? 

With more connectivity, there is always more risk. In the insurance sector, which has been slow to move into the digital world, this risk will be very different to the risk it has previously faced, so it is incumbent on insurance firms to do their due diligence when seeking a tech partner to ensure that they follow the minimum security standards expected of a modern, digitally enabled business.

Q: What does future of Insuretech look like in relation to IOT and what are the trends we’re going to be watching out for in the next 12 months?

There are some huge opportunities for the commercial insurance sector if they can connect andutilise the power of their customers IoT effectively, from gathering dynamic risk data and, ultimately, to develop a deeper understanding of their customer’s risk quality. Customers who have embraced IoT have experienced significant improvements in ESG, risk reduction and claims defensibility. 

In terms of trends to watch out for, I think we’ll start to see many more insurers monitoring dynamic risk factors in near time, enabling them to select and price commercial Casualty and Property policies more accurately for customers and offer more focused additional value add services through claims and risk solutions.