Relationship between insurance sector and IoT is even closer.
Insurance companies have immediately interpreted the phenomenon of connected cars; now the new solutions for managing data produced by the IoT for new markets such as Smart Home, allow the insurance sector the development of new services and the creation of new business models. This relationship between IoT and insurance finds new confirmations also in the research of IoT Osservatorio of the School of Management of Politecnico di Milano.
Utilities and connected cars are the main drivers in the development of the IoT market that, with a 30% growth, reaches 2 billion euro turnover. And “behind” the connected car there is also the strategy of the insurance companies that have contributed to the growth of the sector in 2015 by 24% and that will have new impulse in 2016. Especially considering that a new car out of five registered in Italy is already equipped with on-board connectivity. This scenario opens up to new market principles, by the Smart Car sector players: from insurance precisely to the producers, from sales networks, to telematics operators. Combining the values of utility and connected cars, a volume of 1 billion euro is reached, ie 50% of the entire Italian IoT.
The big issue is that of data and Angela Tumino, Director of the Internet of Things Osservatorio, notes that “the cornerstone for many new services is in the possibility of having even more accurate and detailed data which allow the beginning of new business methods. Next to the stage on the IoT focus on business process improvement, cost reduction and finding greater efficiency towards customers, there is now the phase of new business models, in particular towards the “Pay per Use”.
Insurance have led the way by offering car insurance which vary according to the annual mileage. But the data on drive collected for insurance purposes can also be very useful for other purposes. In particular – said Tumino – can be aggregated and proposed for example to know traffic conditions. Even a physical product such as tires can become a service and be bought no longer as a product in a single moment, but as a service to be paid on the basis of mileage.
And it’s always the insurance sector that is credited as one of the main channels for the development of Smart Home. IoT Osservatorio has devoted a specific focus to the prospects of the smart home and among the players which are working to bring these solutions to consumers there are precisely the insurance companies, which are even more proactive in the development and delivery of policies attached to adoption of devices for safety, for video surveillance, to control of the environment. The interest in the Smart Home sector is evidenced by the fact that, as pointed out by Giovanni Miragliotta, director of the Osservatorio IoT, « if in 2014 there were two insurance companies with proposals for policies linked to Smart Home solutions, during 2015 these rose to 5». The outlook for this market is the development of new models offered in the form of “insurance” kits that increase security by allowing new forms of housing control with reductions in the costs of the policies. Also in this case the data relating to energy consumption, for example, represent a value that can also be used by other players focused on different types of services which have as basis the predictions on energy consumption.
In the development of these new services the creative drive and innovative startups is even greater. Miragliotta highlights in this regard that the number of startups that are taking up the challenge connected to all the opportunities linked to the utilization of data is growing. In the specific context of Smart Home, the Osservatorio research shows that 79% of Italian consumers, stands ready to buy products for Smart Home, with a leap forward of 33% compared to the same propensity recorded last year, although only 25% of those who declare wishing to purchase a product stands ready to do so in the next 12 months.
To understand this user profile, Osservatorio has identified three clusters of customers characterized by different skills, sensitivity and propensity toward Smart Home. Three types were found: Conservatives, Users and Technophiles which differ in the approach toward the “digital home” but also for the channels through which come to the purchase decisions. Conservatives and Users are sensitive about security, energy saving and seeking standards. Technophiles do not scorn testing and within the Smart Home look for comfort and well-being. The offer is approaching the needs of all these customers and there are proposals based on multifunctional hub able to respond to multiple demands. In terms of channels, retail specialized in high tech will be joined by the traditional chain of installers ready to bring to market the Smart Home offering, making more and more leverage on the creation of exhibition spaces to allow Conservatives and Users to experience directly at store the advantages of the solutions. ECommerce, especially for Technophiles, is still a strategic channel also because it allows to have access to almost all of the offer. Then there is, as already mentioned, the role of insurance that are even more active as part of the bundled offer consisting of “control unit and sensor” combined with the house policy, and the service that is developed, in many cases in the form of assistance 24/7 with real-time alerts.