Telematics and the Internet of Things are popular buzz-words in the industry right now, as homes become connected and usage based auto rates become mainstream. But what does this mean for the transportation industry?
Imagine if every shipment held a sensor that tracked its movements, storing all the data in the Cloud. Now imagine if over time, we could use big data and advanced analytics to identify specific shipping routes that have a higher claims frequency than others; which ships seem to be more involved with claims activities and which trucking companies seem to damage their goods more often? Could we use this, and an unlimited number of other factors gleaned from the data, to make our risk selection and rating more precise?
Could we develop usage based insurance products for expensive equipment, airplanes and rolling stock to reward customers who use certain pieces rarely and better rate those with high usage? Might we come up with entirely new products that uses data and analytics about the company’s overall operations to determine rates and coverage?
It’s time that we begin to talking about these emerging technologies and determining how we can use them to better service our customers while improving risk selection and rating. The Internet of Things is about to change how risk is measured. Let’s lead the way.