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The insurance market is facing up to the process of digital transformation in ever more decisive ways. Virtually all providers in the sector see digitalisation as a vitally necessary course of action, in line with the new profile of their target customers and the main technological trends.
For companies in the insurance market, there are now clear opportunities to become a key player in the wave of digital transformation that is currently underway: that of the Internet of Things (IoT).
Much more than just a short-term phenomenon – in view of the estimates that around 25 billion objects will be connected by 2020 – the IoT represents the totality of interconnected “smart” objects that can identify and interpret the context in which we move to trigger “intelligent” actions.
Sectors with quite different characteristics are now all actively investigating the potential benefits offered by the Internet of Things. These are just a few of the examples being viewed with interest by the insurance market:
Innovations of this scale will necessitate profound changes in the fundamental business models used in the insurance industry. To give one example, insuring “driverless” cars will involve products that have structures, analytic capabilities and pricing models that are completely different from those used today.
From a technological point of view, the key to success lies in harnessing the ability to manage the complexity arising from the proliferation of objects through platforms that can “integrate” them quickly and flexibly, while also managing and controlling the vast amount of data derived from the objects in a way that produces information of value.
Nonetheless, a purely technological response is not sufficient in itself. While there's certainly no single recipe for success, it is beyond doubt that companies wishing to anticipate the wave of change will need to make radical adjustments to their business models, based around:
A new way of doing business that is open to a broader competitive landscape which, while offering enormous opportunities, nevertheless requires appropriate preparation. Customer service based on the “retailer” model and a big data-based information management system both represent essential strategic imperatives for tackling the new market challenges in an optimal way.