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There is a major discrepancy with the treatment of the Internet of Things (IoT) in the commercial insurance sector. IoT is a huge topic amongst carriers and the insurtech community, yet studies show that companies are simply not ready for the changes it brings.

A LexisNexis Risk Solutions study of 500 U.S. insurance professionals showed that despite more than two-thirds of respondents agreeing that gathering IoT data is important to their current insurance strategy, only 7% had the resources to use it in decision making. Even more stunning, 95% of those currently collecting data from connected properties, vehicles, wearables, and equipment did not use that data in day-to-day analytics.

In the study’s summary, Bill Madison, CEO of Insurance for LexisNexis Risk Solutions, expressed surprise at the somewhat stark results. “Carriers already use data to make better decisions. But given the looming tsunami of data from the Internet of Things, we were surprised to learn how few are prepared to leverage it into their business strategies and customer offerings.”

This disconnect between the recognition of the power to transform insurers that IoT holds—specifically in the case of commercial underwriters—and the struggle to marshal resources harnessing that power reveals a huge challenge for the industry. It also highlights an exceptional opportunity for those with the right technical infrastructure.

The potential of IoT for carriers

IoT can transform the commercial underwriting process. With access to data provided by connected equipment, “smart” facilities, wearable-equipped workers, and telematics from vehicles, underwriters can peer directly into an organization’s real-world behavior. This affords a much better perspective of risks, and the opportunity to move from periodic, reactive decisions to proactive, continual input.

It also means that underwriters will have the data required to design entirely new products. Usage Based Insurance (UBI), safety programs connected to wearables, and real-time facility assessments via drones and sensor data are just a few of the new types of programs that could be offered. This turns an underwriter from a person applying formulas against spreadsheet figures to someone analyzing complex data and looking for solutions. That transformation also allows the underwriter to spend more time examining policy coverage and become more sales focused.

Impact on Commercial Underwriting

Shifting from reactive to proactive, as well as from administration to analytics, will impact the process in key ways.


While underwriters will have more data available for each review, with the right solution review cycles should shrink dramatically. Mike Adler, a KPMG Principal, stated in the report Enabling the Future of Underwriting, “With the emergence of robust technology, underwriters will be able to perform more accurate and more informed risk assessments in a fraction of the time it currently requires.”

With access to real-time data, the speed at which data enters the analysis process will also increase. Instead of periodically gathering and assessing data solely at renewal time, the ability to monitor progress, adjust rates, and provide real-time suggestions for corrective actions means that insurance could change from a cyclical process to a continual one.


The scope and depth of new data points made available through IoT provides a much more accurate picture of risk in an organization versus relying on traditional metrics. Jessica Twentyman writes in an article on the IoT Focused website, internet of business, “... [D]ata coming from IoT devices will increasingly add to the picture, giving underwriters valuable clues and insights into aspects of risk that they might not previously have considered.”

With this added insight, underwriters gain more than just a set of numbers surrounding a policy—they get a better sense of the story behind the numbers. Twentyman continues, “This last point is extremely important, because when insured assets (buildings, machinery or trucks, for example) are rigged with sensors, this ‘smartness’ can tell underwriters a great deal about the risks they face and, if misfortune strikes, more about the circumstances leading up to that incident.”

Risk avoidance

Arguably the largest impact will come from transforming underwriting from a process primarily centered on assessing previous activity, to one focused on preventing future incidents. The economics of mitigating or eliminating claims can change the entire nature of the underwriter/client relationship. “It also allows them to evolve from being simply payers of claims to valued partners that help their customers monitor, mitigate and avoid risk,” says Accenture’s Erik Sandquist. “For some, this will lead to transformed customer relationships and entirely new sources of customer value and revenue from hybrid product/services. It really does open up a new world of opportunity for the industry.”

Data Challenges

If the potential upsides of integrating IoT with commercial insurance underwriting are so transformational, why are only 7% of respondents in the LexisNexis Risk Solution survey actually implementing strategies? The short answer is, “data.” IoT brings with it an exponential explosion of data, much of it unstructured. To get an idea of the levels of data we are dealing with, one estimate says that by 2020 every person will create 1.7 MB of data every single second.

The sheer volume of this data may potentially swamp legacy systems. The problem is compounded by the unstructured nature of much of that data. Cisco states that currently “less than 1% of unstructured data is analyzed or used at all.” Without the right systems in place, all of this data turns into nothing more than background noise.

Essential elements

To harness the opportunities of IoT, while overcoming the challenges it presents, there are several critical components any solution will require. Flexibility is the first element. The proliferation of connected devices, and the data generated by them, will continue to change. Your system needs to be able to handle not just today’s tools (and data types), but whatever will come up tomorrow as well.

The next element is your organization’s ability to iterate quickly. IoT-empowered commercial underwriters will be on the front lines of your organization’s product development. Your solution must be able to accommodate rapid iterations of implementing new client-specific requests, monitoring results, and developing adjustments. If you can’t pivot quickly, you risk losing clients to those who can.

The last element is the ability to push data to the right people at the right time. Configuring the triggers for alerts, notifications, and reports so that they deliver timely, specific information is the difference between actionable intelligence and white noise.

Origami Risk’s solutions for insurers

With Origami Risk’s extensive data integrations, creating a single platform solution that can pull both structured and unstructured data from IoT sources and link it with claims, policy, renewal, and other key data is within reach. The solution’s flexibility allows for easy configuration whenever shifting technology presents new opportunities.

Not only do underwriters need access to IoT data and next-generation policy and rating information, but so do agents/brokers and end customers. Each of these groups can benefit from turning this new type of information into action. Creating easily configured portals, tailored to what each client needs to see, allows you to spread the benefits of IoT across the entire insurance value chain.

Powerful, flexible reporting ensures that IoT data can trigger alerts, notifications, and reports that put timely information in the right hands. Automating this piece means your organization will spend less time trying to discover key information and more time making educated decisions in real time.

The opportunities presented by IoT justify the current buzz in the industry. Conversely, the problems legacy systems and processes have working with the explosion of unstructured data it creates explains the gap in adoption. With the right platform, your organization can compete on innovation and speed to market, making it harder for current clients to leave and clearly demonstrating the value you could provide new ones.

See our solutions for yourself. Request a demo today.