Commercial Property Insurance helps you protect the buildings that you use in your business. Commercial properties can be incredibly varied in both their usage and makeup. This means that commercial property insurance has to be flexible enough to cover whatever risks you might face. Responding flexibly to potential claims and risks means making the use of all the advances in technology available to you. To continue responding flexibly to customers, commercial property insurers are starting to look towards the Internet of Things (I.O.T).
What is the Internet of Things?
The Internet of Things is a complicated sounding concept. However, it is not necessarily a complicated idea. The Internet of Things refers to the idea of multiple items or objects being connected to the internet. These items then communicate the data that they gather with you and with each other. This means that the data can be combined together to give a broader picture.
How can it be used in Insurance?
Ideas similar to the I.O.T are already used in some aspects of insurance. Many people, particularly younger drivers, have a black box recorder on their car. This gathers data and proves to insurers that drivers are as safe as they say they are. The I.O.T could allow buildings to do much the same. Data could come at three different levels: from the building as a whole, from the individual rooms, and from parts of the rooms. This data could allow insurers to evaluate how much of a risk the property really is.
How will this benefit you?
Prices go up with insurers when they believe that the risk is high. Data analysis could help insurers understand more about what really constitutes a risk. This, in turn, could lower insurance premiums. Using mass amounts of data, and computers to analyse the data promises a future without human error. Estimates suggest that 87% of cases of business interruption are caused by technical or human factors.
Is this really the future?
The I.O.T is likely to become a major part of many industries over the next few years. Whether insurers take it up is harder to tell. The Internet of Things has enormous potential to revolutionise how insurance works. If insurance companies allow it to live up to its potential, it could change how insurance works for both insurers and customers.