How people are using the Internet of Things
We use smart devices to monitor many of our daily activities: there are smart shower heads and toothbrushes that track our morning routines, activity trackers that monitor our fitness routines, and smart fridges and dishwashers that help us stay on top of household chores.
All of these devices share data with each other, making them part of the IoT. For example, when you wear your activity tracker on a run, it measures your time and distance, and then shares that information with your phone and laptop, where you can access it.
The data shared on the IoT is used to improve our health, wellbeing, finances and life in general, but can it also be safely used to aid the businesses that serve us products?
Connected devices are often installed in the home, in a car or are even wearable – and so have applications across many of the insurance products LV= offers, such as home insurance
Smartphones and tablets are the most common, but there are many electronic, connected devices that are now a mainstay in UK homes, such as virtuals assistants.
'Connected devices can provide us with great insight and we can get to know our customers better than we have ever done before,' observes LV= general insurance fraud director Claire Lunn.
How insurers are using data to save customers money
Getting to know customers has already helped LV= adapt their car insurance.
The LV= telematics app allowed customers to measure their driving style, and safer drivers were rewarded with better insurance premiums. LV= was able to use the data from the connected device, in this instance smartphones, to improve the service they were providing to customers.
But there are many other ways insurers use the IoT.
At home, smart devices such as thermostats and washing machines can save you money on your energy bills. Smart locks and security systems, meanwhile, add an extra layer of defence to protect your home and its contents
Providers can also use this data to offer people deals on their insurance if their homes have improved security or better performing appliances.
'Through constant monitoring, underwriters can recommend real-time pricing and policy term modifications,' observes an EY report
from last year.
Sorting out claims more quickly
The wealth of information that the IoT produces not only helps insurers build up a profile of their customers – it could also help improve the claims process.
'Instead of relying on customers to remember information and suspecting them if they make errors of memory, we can simply source the answers ourselves in real time,' explains Claire.
If a smart security camera captures a burglary, the footage could be used as evidence to show what items were taken, helping insurers calculate the payment on the policy.
A flood or fire in the home could be tracked by data gathered from smart heating and electrical sensors, in order to assess the damage caused and the value of the insurance claim. The victim would then be given the exact help they needed as quickly and efficiently as possible.
Having a smart dash cam in your car
, meanwhile, would make footage of any accident that resulted in a claim easily accessible to insurers.
Staying vigilant and protecting against potential fraud
Of course, with all the personal data being created, it's vital that both insurers and customers protect against fraud.
'What's clear from our data is that we're seeing an increase in some fraud trends,' says Claire. 'Within LV=, we're taking steps to protect our customers, our employees and our business from fraudulent activity.
However, as well as creating the data that fraudsters might take advantage of, the IoT also provides the tools to tackle them.
'At the same time, the IoT does also allow insurers to stay ahead of the game,' reveals Claire.
For example, social media posts were used recently to uncover fraudulent holiday sickness claims
. A couple was convicted when they tried to claim £20,000 from a travel agency due to sickness after Facebook posts were uncovered revealing that they were lying.
Tackling fraudulent claims reduces the costs for insurers – savings they can then pass on to customers.
What insurance and the Internet of Things could mean for customers
With all the data at their disposal, insurers like LV= will be able to tailor products more accurately to their customers' needs, potentially saving them money. In the near future, you could even be building your own insurance product, based on your needs and budget, with the help of insights that your personal data has created.