“Who Moved My Cheese” by Spencer Johnson is an apt description of what’s happening to the broker community today. You are under attack on all fronts. Carriers are developing direct-to-consumer communication mechanisms, private equity has seen the profit margins for broker companies and has aggressively moved in to acquire and expand, there is increasing pressure on brokers to heavily invest in their technological transformation initiatives to maintain relevance, and now the Internet of Things (IoT) devices have arrived that threaten to disrupt the fundamental insurance business model, and with it, broker commissions. This creates a firestorm for all those who have enjoyed a high renewal rate/lifestyle business for, in some cases, decades.
A very well-publicized example, Hippo Insurance provides to its insureds a smart home kit containing five sensors, which go on front and back doors, one on the ceiling in the kitchen, one near the washing machine, and one near the water heater. In exchange for using these devices, Hippo provides a premium discount of up to 25%. Using these devices is a condition of coverage and is reflected in the policy form.
When you understand that IoT devices have the fundamental opportunity to provide extremely effective risk management/mitigation strategies at scale, which could ultimately reduce insurance premiums by anywhere from 15-40%, there is a definite motivation to at least learn all you can about this threat so you can prepare for if and when it becomes necessary to do so. With the anti-rebating legislation that exists, there is still uncertainty around the go-to-market strategy for these IoT devices, at least for commercial insurance. However, with 60% of insurance companies that have piloted or are considering pilots of IoT programs and 15% of carriers have launched IoT-based solutions, this is something that brokers must pay attention to.
Continue reading: https://www.propertycasualty360.com/2021/09/17/the-internet-of-things-is-moving-the-brokers-cheese/?slreturn=20210817125512
A very well-publicized example, Hippo Insurance provides to its insureds a smart home kit containing five sensors, which go on front and back doors, one on the ceiling in the kitchen, one near the washing machine, and one near the water heater. In exchange for using these devices, Hippo provides a premium discount of up to 25%. Using these devices is a condition of coverage and is reflected in the policy form.
When you understand that IoT devices have the fundamental opportunity to provide extremely effective risk management/mitigation strategies at scale, which could ultimately reduce insurance premiums by anywhere from 15-40%, there is a definite motivation to at least learn all you can about this threat so you can prepare for if and when it becomes necessary to do so. With the anti-rebating legislation that exists, there is still uncertainty around the go-to-market strategy for these IoT devices, at least for commercial insurance. However, with 60% of insurance companies that have piloted or are considering pilots of IoT programs and 15% of carriers have launched IoT-based solutions, this is something that brokers must pay attention to.
Continue reading: https://www.propertycasualty360.com/2021/09/17/the-internet-of-things-is-moving-the-brokers-cheese/?slreturn=20210817125512
