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For the insurance industry, the Internet of Things (IoT) holds tremendous promise. Take automobile insurance as an example. Today, insurers can use connected vehicles and the IOT to gather sensor data regarding driving behavior, location information, vehicle diagnostics, and more. This has enabled insurers to deliver usage-based insurance (UBI) offerings such as PAYD and PHYD (pay as you drive and pay how you drive). Some companies have gone even further with features such as automatic crash notification, geo-fencing, repair notification, roadside assistance, and personal concierge services.

Collaboration and the means of delivery

This is a good start – but to capture and deliver the full value of what the IoT has to offer, insurance companies need to come to terms with the ways in which this value is delivered. And with the IoT, the ability to deliver value increasingly depends on collaboration.

The fact is, in the age of the IoT, value chains are too multifaceted for any single market player to deliver everything on their own. For auto insurers, one obvious way forward is to collaborate more seamlessly with auto manufacturers. These manufacturers, after all, are building the cars with the sensors in them already. If they choose, they could start to offer IoT-based insurance themselves.

This may be overstating the case a bit. After all, manufacturers don’t necessarily have the expertise to move into the business overnight. But the writing is on the wall for insurers: start collaborating or start to lose market share.

Silos no more

For the traditional siloed insurance company, this is bad news. For the forward-thinking company that is ready to change, it’s very good news indeed – because the IoT offers tremendous opportunity.

Change, however, requires insurers to fundamentally reimagine their business models to break down silos and facilitate collaboration. One-off projects that keep siloed processes and landscapes intact will fall short. Instead, insurers need comprehensive digital transformation. But just as no single company or industry can dominate the entire customer value chain on its own, no single vendor can deliver out-of-the-box IoT on its own. Thus, what insurance companies need is an application development framework based on open standards to rapidly create solutions for various IoT scenarios.

Connect, transform, reimagine

This is where SAP can help quite a bit. Take for example, SAP HANA Cloud Platform. As the name suggests, this is a cloud-based, in-memory platform that helps you open up and automate processes at the core of your business – enabling you to connect to almost anything in collaborative fashion to deliver the value your customers seek.

With SAP HANA Cloud Platform, you have access to core capabilities such as predictive analysis, geo-spatial processing, series data, and location services. On top of this, you can also use SAP Vehicle Insights, a cloud-based application that links vehicular data with sensor data to provide actionable insight. And to do all of this in a collaborative way, you can use SAP Vehicles Network – a B2B business network solution that facilitates connections among different market players.

With a foundation like this in place, you can rapidly develop, deploy, and manage real-time IoT applications – and connect them to the larger customer value chain in collaboration with new business partners as new use cases emerge. In the end, this gives you the agility you need to move quickly and seize the advantage in an increasingly networked economy where value is measured by the quality of the customer experience you deliver.

Want to learn more? Visit us at or find me via Twitter at @UweHofstaetter.

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Good news for the insurers - Internet of Things opens up new business models and is able to enhance the touchpoints with their customers

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Love the discussion of Insurance in the Networked Economy!!!