Matteo Carbone has advised over 110 organizations in more than 15 countries on IoT insurance projects. He has worked with players accounting for over 80% of IoT insurance volumes and debated IoT opportunities at over 110 conferences. Carbone has also authored 5 papers on Insurance IoT with international organizations. Some relevant IoT insurance success stories include products sold through current channels, fees paid for services including device rental, usage of data for multiple uses like risk selection and pricing, value shared with customers through discounts, and insurers providing devices and apps. Insurers can create a bundle between insurance and IoT services by using data to improve underwriting while delivering services to create value that can be shared with customers.

1. Lessons learned with insurance IoT
at international level
Matteo Carbone
Founder and Director, IoT Insurance Observatory
@mcins_

2. 2
My experience with IoT insurance
Organizations
In the past 6 years,
I advised more than 110 organizations (Insurer,
Reinsurers, Brokers, Vendors, and Investors) in
more than 15 different countries
on IoT insurance projects
+110
Market share
I’ve worked directly with players accounting
for more than 80% of IoT insurance volumes
(number of policies on auto telematics,
smart home, and connected health/life)
+80%
5 +1200
+110 Conferences
I have debated the insurance IoT
opportunity at more than 110
conferences around the word since
December 2015
Papers
I have produced 5 white
papers on Insurance IoT, which
have been co-authored with
prestigious
international organizations
Hours
Almost 1200 hours discussing
concrete experiences, best
practices and pitfalls with the
executives of the organization
members of the Observatory

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Even in the insurance sector, we are in the age of post truth
Telematics is
usage-based
insurance
IoT Insurance is about
how to collect data to find a
profitable underwriting formula
It’s is impossible
for an insurer to
charge fees to
customers for
services
Customers don’t want
to share data with us
Converting IoT data into
actionable insights is still a
wish… we are not yet ready to
make smart actions
IoT is not able to select
risks better than the
credit score
There is no ROI on
Insurance IoT, it is only
premium shrinking
To make insurance IoT
works insurers need to
work with OEMs, GAFA…
What have you heard about Insurance IoT?

4. 4
There are some relevant IoT insurance
success stories out there
What has
worked
as of today:
1 A product sold through the current distribution channels
(frequently as an option on an existing product)
2 Fees paid by the customer for services (including the renting of the device)
3 Usage of the data for activating multiple use-cases in order to create value
on the insurer’s income statement (risk self-selection, claims, change of
behavior, pricing)
4 Relevant amount of value shared with customer through discount, cash-
back, incentives, ..
5 A close system with device/app provided by the insurer

5. 5
Home insurance
coverages
Devices Services
An enhanced insurance value proposition

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The bundle between the insurance contract
and services
The Insurance players have a unique competitive
advantage vs any other service providers:
• Because the same data used to deliver services allows to
improve the insurance activity (assess, manage and
transfer risks)
• This way IoT allows to create value on the insurance P&L
• This value can be shared with the client creating a valuable
bundle between insurance coverages and IoT solutions
The bigger the difference between insurance premium and service cost,
the higher the potential of the insurance IoT approach
Connected
insurance
paradigm

7. 7
RISK SELECTION:
• Low-risk customer acquisition due to the storytelling
of the IoT insurance product
• Improved quality of underwriting process based on
sensors data (including constant insights on exposure)
• Increased underwriting process efficiency
RISK-BASED PRICING
• More accurate rating: based on
measured "quantity" and "level" of
risk exposure
• Value propositions more attractive to
the customers
BEHAVIORAL CHANGE
• Indirect impact on risk level through:
-positive behavior reinforcement (including
gamification)
-culture creation
• Loyalty systems based on detected behaviors
(retention of low risk clients)
LOSS CONTROL
•Usage of the device information in order to anticipate claim
management and improve reimbursement valuation
•Initiatives acting directly in real-time on single situations to:
-mitigate risks before damages occur
-contain damages
•LAE reductions
•More accurate reserving
Value
Creation
Levers
How have insurers create economic value?
SELL SERVICES…
• …based on sensor data to deliver enlarged value propositions for
the clients orchestrating an ecosystem of partners
• …concerning information about insurance coverage and insured risks

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…this way will be higher the value that can be
shared to drive the adoption

9. 9
…this way will be higher the value that can be
shared to drive the adoption
Incentives and discounts are
ways of sharing with the
customer part of the value
create in order to deliver
superior value propositions

10. 10
Insurance IoT reasons why
Value creation
IoT improves insurance
profit & loss and allows
insurers to share part of
this value with the
customer in order to
increase product
adoption
1
Interaction frequency
It enhances proximity
and interaction
frequency with the
customer while creating
new customer
experience, increasing
retention and expanding
relationships
2
Knowledge creation
IoT approaches create
and consolidate
knowledge about risks
and the customer base
which will lead to the
next generation of
products and services
3
Sustainability
Insurance IoT enables a
new virtuous role by
providing positive
externalities for a
sustainable society
4

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These thoughts come from the IoT Insurance
Observatory
To join the Observatory feel free to write to matteo.carbone@iotinsobs.com