Event Recording and Summary...
At our event on February 2nd, we heard from four commercial property owners who are changing how they manage risk with sensors and real-time data.
The key takeaway - "Insurers have yet to advance their products to accommodate the risk data benefits of IoT"
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Commercial property owners do not engage often enough with insurance and there’s a real disconnect between the evolving use of technology for building operations and the insurance for the building.
IoT is becoming more and more relevant for managing risk as well as being tied to the overall value proposition for the revenue for these buildings and facilities. When occupancy is low, revenue is impacted. Certain types of IoT can help give more comfort to building users/ occupiers to return to buildings and venues.
IoT has a role in connecting internal silo’d teams together: there's a disconnect between the operations side of businesses which is very focused on doing their job and delivering their product and the corporate side of the business, managing the corporate including managing risk. It’s a challenge to get those two parts of the business together and to really demonstrate that the business case for IoT is a good one.
Some commercial property owners may not give IoT data ‘away’ in exchange for premium discounts because there are probably things they would prefer their insurers not to know and even with that data sharing, upon review, this may result in an increase of premium. And so the relationship between insurers and customers is one that needs a rethink: with more transparency about the building operations, and it turns out to be more risky, you need trust and probably a longer term relationship with an insurer where you work collectively together to improve risk, with the immediate goal of loss reduction, and over time a premium reduction.
IoT is enabling new business models such as ‘power by the hour’ or ‘space as a service’.
IoT is delivering a far bigger business case on power and water consumption impact than on risk impact. So to do a business case, you need to consider several different lenses, look across holistically your business, and it's a real strategic imperative.
There are many many suppliers of IoT hardware – that is not the challenge, it’s the data: getting it into the right format, how to sift through the massive amounts of data into meaningful data, how to get just the signals and not have to store and persist the millions of data points from millions of customers and how to augment the submission rating platform to accommodate all this extra data for improved risk assessment and how do we get that information to the actuary so they can better assist the portfolio.
There’s a significant opportunity to collaborate across commercial property owners/ managers and the insurance industry: IoT has the power to move the customer and insurer relationship to the next level to become a partnership for risk mitigation, no longer just a financial transaction as it is today.