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IoT in insurance: Opportunities and use cases


Prasanna Shukla

June 12, 2024

IoT in the insurance industry: An overview

Insurance is a resilient industry with a strong sense of purpose, providing protection and a more secure future for people, families, and businesses. With the widespread adoption of IoT in insurance, the industry is experiencing a revolution, providing insurers with opportunities to innovate.

They can create new products, explore novel distribution channels, and expand their services to encompass prediction, prevention, and assistance, thereby adapting to this transformative environment.

The Internet of Things (IoT) is poised to change the world radically in the coming years, and networked devices will be a substantial part of that change. The number of Internet of Things (IoT) devices worldwide is to increase by almost 60%, from 17.08 billion in 2024 to more than 29 billion IoT devices in 2030, as per a report from Statista.

Let’s start by understanding what networked devices are: 

With capabilities like feature sensors and automatic activation, networked devices are popular among individuals across various facets of their daily routines to make their lives easier.

The installation process is fast and convenient, enabling the user to wear it conveniently on the body. Also, with the facility of data transmission to service providers or third-party entities, users can have real-time analysis or the automatic initiation of responses and services.  

Consequently, they reshape conventional business practices and operational frameworks across multiple industries.

How do networked devices help insurers?

Until now, insurers have primarily employed IoT functionalities to enhance customer engagement and expedite the underwriting and claims procedures. Nevertheless, there is a growing emergence of novel IoT-driven services and business frameworks that hold significant appeal for insurers. In this changing landscape, IoT-facilitated connectivity can become a crucial element for insurers. As an example of IoT in insurance, insurers may collaborate with enterprises to deliver enhanced or innovative cross-industry offerings leveraging IoT technologies and evolving ecosystems.

Benefits of IoT in insurance

Generate additional revenues
  • Through cross-selling and frequent customer interactions
  • Monetize the data offered by IoT devices
  • Prices can be adjusted based on usage
Reduce costs
  • Triggers automatic maintenance, increases efficiency, and optimizes resources
  • Improve response time and safety
  • Sensor-sensitive devices help prevent fraud, saving insurers’ money

Applications of IoT in insurance

Life insurance
  • Health monitoring wearables: Insurers can offer policyholders wearable devices that track vital signs such as heart rate, sleep patterns, and exercise activity. This data can be used to incentivize healthy behaviors through premium discounts and provide early warning signs for potential health issues.
  • True story: IoT based livestock health monitoring system
Health insurance
  • Remote patient monitoring: IoT devices, such as connected glucose monitors, blood pressure cuffs, and scales, allow insurers to remotely monitor patients with chronic conditions. This real-time data enables proactive interventions, reduces hospital readmissions, and improves overall health outcomes.
  • Smart pill dispensers: IoT-enabled pill dispensers can monitor medication adherence and notify patients and caregivers of missed doses. This helps prevent medication errors and ensures patients follow their treatment plans effectively.
Vehicle insurance
  • Telematics devices: Insurers use telematics devices installed in vehicles to collect data on driving behavior, including speed, acceleration, braking, and mileage. This information enables usage-based insurance (UBI) programs, in which premiums are based on actual driving habits, resulting in fairer pricing and incentivizing safer driving.
  • Vehicle recovery systems: IoT-enabled GPS trackers installed in vehicles can aid in theft recovery by providing real-time location data to insurers and law enforcement authorities. This reduces the financial losses associated with vehicle theft and enhances asset protection.
Personal property insurance
  • Smart home sensors: IoT sensors placed throughout the home can detect risks such as water leaks, smoke, and intrusions. In the event of an incident, these sensors send alerts to homeowners and insurers, enabling swift response and minimizing damage. Some insurers offer discounts on premiums for homes equipped with smart security and monitoring systems.
  • Asset tracking devices: The user can equip high-value personal belongings such as jewelry, artwork, and electronic gadgets with IoT tracking devices. In cases of loss or theft, these devices help insurers locate and recover the assets, providing peace of mind to policyholders.
Commercial insurance
  • Industrial IoT (IIoT) sensors: In industries such as manufacturing, logistics, and construction, IoT sensors can monitor equipment performance, environmental conditions, and worker safety. Insurers use this data to assess risk, prevent accidents, and optimize insurance coverage and pricing.
  • Fleet management solutions: For businesses with vehicle fleets, IoT-enabled solutions provide real-time monitoring of vehicles’ location, condition, and driver behavior. Insurers can offer fleet telematics programs that promote safer driving practices, reduce fuel consumption, and minimize maintenance costs.

These are just a few examples of how IoT is transforming various insurance domains, enhancing risk management, improving customer engagement, and driving operational efficiency. As technology continues to evolve, the potential for the IoT to revolutionize the insurance industry remains boundless.


Insurers should see the development of IoT services as a long-term investment in future capabilities. They must position themselves as appealing partners for current IoT providers, securing their place in the ecosystem and delivering real value to customers. Long-term success and returns on innovative investments will only be achieved if customers recognize and appreciate the benefits, such as better prices and discounts, additional services, and increased convenience.

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