IoT-Powered Claims: Building Capable IT Teams In Insurance

February 2, 2024

Have you noticed how technology is changing the way insurance companies handle claims? The Internet of Things (IoT) is making a big impact in this area, and it's creating new opportunities for IT professionals in the insurance industry.

IoT devices are becoming more common in our homes and cars. They collect data that can help insurance companies process claims faster and more accurately. According to a recent study by Accenture, AI technologies, which often work hand-in-hand with IoT, could boost the insurance industry's profitability by up to 40% by 2035. This shows just how valuable these technologies are becoming in the insurance field.

What new IT roles are emerging in this IoT-driven claims process? How can insurance companies adapt their IT teams to meet these new demands? What skills should IT professionals focus on to stay competitive in this changing field? In this blog, we'll answer these questions as we learn more of the impact of IoT on insurance claims processing. 

What IoT stands for in the Insurance Industry

The Internet of Things (IoT) refers to the network of connected devices that collect and exchange data. In insurance, this includes everything from smart home devices to telematics in cars. These technologies are particularly related to claims processing, as they provide real-time data that can speed up and improve the exactness of claims.

Let's look at some numbers that show the scale of IoT's impact on insurance:

According to Market Research, the global IoT insurance market size was estimated at USD 15.09 billion in 2023 and is projected to grow at a CAGR of 29.7% from 2024 to 2030. That's a compound annual growth rate (CAGR) of 55.72%. This fast growth means insurance companies need more IT experts who understand IoT technology and its applications in claims processing.

Consumers are also accepting IoT devices. A LexisNexis study found that 78% of smart home device owners are willing to share data from their devices with insurance companies to help with policy pricing. This openness to data sharing creates a need for IT professionals who can manage and analyze this flood of information, specifically in the subject of claims.

For insurance companies, this growth in IoT adoption means you'll need IT talent who can:

  • Develop and maintain IoT platforms for claims processing
  • Ensure data security and privacy of claims-related information
  • Create algorithms to analyze IoT data for faster claims assessment
  • Design user-friendly interfaces for policyholders to submit claims using IoT data

Assembling a team equipped with these skills will empower your company to harness the full potential of IoT in streamlining claims processing. The right IT professionals will help you integrate IoT data into your claim’s workflows, potentially changing how you handle and assess claims.

How IoT Changes Claims Processing

Insurance companies are finding new ways to improve their claims processing through IoT. Let's look at major benefits that IoT brings to claims processing, and why having the right IT talent is necessary to realizing these advantages.

Faster Claims Processing: 

IoT devices can send real-time data to insurers when an incident occurs. For example, a smart home water sensor can instantly alert the insurance company about a leak. This quick notification lets claims adjusters start the process right away. With the right IT systems, like automated claims management software, much of this can be handled without human help. 

Your IT team can create programs that look at the incoming data and kick off the claims process automatically. They might use tools like Python for data analysis or platforms like Guidewire ClaimCenter for claims management.

More Accurate Claim Assessments:

IoT sensors give us solid, factual data about incidents. Take car insurance, for example. Telematics devices in cars can record things like speed, how hard the brakes were applied, and the force of impact during an accident. It's like having a reliable eyewitness for every claim. 

Your IT team can build systems to make sense of all this data. They might use tools like R or SAS for statistical analysis, or machine learning platforms to spot patterns. These systems can help figure out how bad an accident was, and estimate repair costs more accurately. It's a win-win: your company saves money, and policyholders get fair payouts based on what really happened.

Fraud Detection and Prevention:

IoT devices make it harder for fraudulent claims to slip through. They provide a digital record of events that's difficult to fake. Your IT team can use tools like TensorFlow or Scikit-learn to build machine learning models. These models can spot odd patterns in IoT data, helping to catch potential fraud. For example, a car's telematics device might show it was parked when the owner claims it was in an accident. Or a smart home system might reveal that a reportedly stolen item never left the house. 

Software like IBM's Counter Fraud Management can help analyze this data. This technology not only saves your company money but also helps keep premiums lower for honest policyholders. 

Predictive Maintenance and Risk Reduction:

IoT sensors can spot possible issues before they turn into big problems. Let's say a homeowner has a smart water sensor installed. It can detect a small leak under the sink that might go unnoticed. Your IT team can set up systems using platforms like Microsoft Azure IoT or AWS IoT to collect and analyze this data. When the system detects an issue, it can automatically send an alert to the homeowner's smartphone via a custom app. 

For example, the app might say, "Possible leak detected in kitchen. Check under sink." This heads-up lets the homeowner fix the problem before it causes major water damage. 

Personalized Policies and Pricing:

IoT devices give us a clearer picture of how policyholders actually behave and what risks they face. Your IT team can use this data to create more exact risk models. They might use tools to crunch the numbers and spot patterns. 

Let's say you're insuring drivers. A telematics device in the car can track things like speed, braking habits, and time of day the person usually drives. Your team could use software like Verisk's IoT/Telematics Analyzer to make sense of this data. This approach makes pricing fairer – people pay based on their actual habits, not just general statistics.

Improved Customer Experience:

IoT can make the claims process smoother and more transparent for policyholders. With the right IT setup, customers can track their claims in real-time and get faster answers. Your IT team can create easy-to-use apps or websites for this. 

For example, they might use platforms like React Native to build a mobile app that works on both iPhones and Android phones. This app could let customers submit claims right from their phone, using data from their IoT devices. The app could also show claim status updates, just like tracking a package. For a web portal, tools like Django or Ruby on Rails. These tech solutions make life easier for customers, which often leads to happier, more loyal policyholders. 

New IT Roles in IoT-Driven Claims Processing

The mixing of IoT in claims processing creates a need for new IT roles in insurance companies. These positions require a blend of technical skills and insurance industry knowledge. Let's look at major roles that are becoming increasingly important as IoT changes how we handle claims:

IoT Data Analyst

This role focuses on interpreting the massive amounts of data generated by IoT devices in terms of claims processing. IoT Data Analysts use advanced analytics tools to extract meaningful insights from sensor data. They play an important role in improving the accuracy of claims assessments and detecting patterns that may indicate fraud. Their work directly impacts the efficiency and effectiveness of the claims process.

Responsibilities:

  • Develop and apply statistical models to IoT data for claims assessment
  • Identify trends and patterns in claims data to inform policy decisions
  • Collaborate with claims adjusters to improve data-driven decision-making

IoT Security Specialist

As IoT devices collect sensitive data related to claims, security becomes invaluable. IoT Security Specialists make sure that all IoT systems and data transfers are safe from cyber threats. They work to protect both the company's interests and policyholders' privacy. Their role is necessary in maintaining trust and compliance in the claims process.

Responsibilities:

  • Implement and maintain security protocols for IoT devices and networks
  • Conduct regular security audits and weakness assessments
  • Develop incident response plans for potential IoT security breaches

IoT Systems Architect

These professional designs and oversee the implementation of IoT systems used in claims processing. They ensure that various IoT devices can integrate smoothly with existing claims management systems. IoT Systems Architects also plan for adaptability as the number of connected devices grows. Their work forms the foundation for efficient, IoT-driven claims processing.

Responsibilities:

  • Design flexible IoT architectures that integrate with claims processing systems
  • Evaluate and select appropriate IoT technologies and platforms
  • Collaborate with various departments to align IoT systems with business needs

Claims Automation Developer

Claims Automation Developers create software that automates parts of the claims process using IoT data. They build systems that can initiate claims, assess damages, and even approve straightforward claims without human help. Their work significantly speeds up claims processing and cuts manual errors. This role combines programming skills with an understanding of the claims process.

Responsibilities:

  • Develop algorithms for automated claims processing using IoT data
  • Create and maintain APIs for integrating IoT data into claims systems
  • Implement machine learning models for claims assessment and fraud detection

IoT User Experience (UX) Designer

IoT UX Designers focus on creating intuitive interfaces for both claims adjusters and policyholders to interact with IoT data. They make sure that complicated IoT information is presented in an easily understandable format. Their work is essential in making IoT-driven claims processes user-friendly and accessible. This role helps maximize the benefits of IoT by guaranteeing its effective use.

Responsibilities:

  • Design user-friendly interfaces for claims processing applications
  • Conduct user research to understand the needs of claims adjusters and policyholders
  • Create data visualizations that make IoT data easy to interpret

IoT Product Manager

IoT Product Managers oversee the development and implementation of IoT solutions for claims processing. They work at the intersection of technology, business, and user needs. These professionals guarantee that IoT initiatives align with the company's overall claims strategy. They also manage the lifecycle of IoT products used in claims processing.

Responsibilities:

  • Define the roadmap for IoT products used in claims processing
  • Coordinate between technical teams, claims departments, and stakeholders
  • Analyze the performance of IoT solutions and drive continuous improvement

10 Ways How to Adapt IT Teams for IoT-Driven Claims Processing

As IoT changes claims processing, insurance companies need to adapt their IT teams. Also, the fast pace of IoT development means that even those with appropriate skills need to continuously update their knowledge. Here are 10 practical ways to meet these new demands:

1. Upskill Existing Staff

Provide training programs on IoT technologies, data analytics, and machine learning. This helps your current IT team acquire new skills relevant to IoT-driven claims processing.

2. Hire Specialized Talent

Recruit professionals with expertise in IoT, data science, and cybersecurity. Look for candidates with experience in both technology and insurance.

3. Create Cross-Functional Teams

Form teams that combine IT professionals with claims experts. This promotes knowledge sharing and ensures IoT solutions align with claims processing needs.

4. Establish IoT Centers of Excellence

Develop dedicated units within your IT department focused on IoT implementation and innovation in claims processing.

5. Partner with Tech Companies

Collaborate with IoT vendors and tech firms to access specialized knowledge and stay current with the latest IoT developments.

6. Implement Continuous Learning Programs

Set up ongoing education initiatives to keep your IT team updated on emerging IoT technologies and their applications in claims processing.

7. Encourage Innovation

Create a culture that supports experimentation with new IoT technologies. Allow time for IT staff to explore and propose innovative solutions for claims processing.

8. Develop a Clear IoT Strategy

Create a roadmap for IoT integration in claims processing. This gives your IT team clear goals and helps prioritize skill development.

9. Invest in IoT Infrastructure

Allocate resources for IoT-specific hardware and software. This gives your IT team the tools they need to implement and manage IoT solutions effectively.

10. Foster Data Literacy Across Departments

Train non-IT staff in basic data interpretation. This helps claims adjusters work more effectively with IoT data and IoT-focused IT professionals.

IoT brings powerful tools to claims processing. It speeds things up, makes assessments more precise, and helps catch fraud. But these benefits don't come automatically. They require the right people with the right skills. Insurance companies need IT teams who understand both technology and the insurance business. This means bringing in new talent and helping current staff learn new skills. It's a big change, but one that can lead to happier customers and a stronger business.

Ready to boost your claims processing with IoT? At Strategic Recruiting Partners, we're experts at finding top IT talent for insurance companies. Whether you need data wizards, security gurus, or software developers who know insurance inside out, we've got you covered. Contact us today to make your claims process faster, smarter, and more customer-friendly!