Improved Service, Happier Customers

Nowadays, most Internet of Things devices in the market serve consumers and allow us to have a “connected life” we could of only dreamed of a decade back. From tapping on our smartphones miles away from our home we can control heating and air conditioning, switch the lights on or off, and see if someone has really broken into our place when the alarm went off or if its just the neighbor’s cat sneaking into our kitchen. Although this undoubtedly is pretty cool, and makes us, normal consumers, feel as we’re living in the age of the Jetsons, the power of the IoT goes way, way beyond the confines of our personal lives, and is of great use for enterprises, especially service providers. Devices connected to the Internet will allow these kind of companies to closely monitor how much of their service we actually consume, and constantly and immediately modify their offer according to our behavior.

Progressive Auto Insurance, in the United States, is one of these companies that have capitalized on the IoT. As its name implies, Progressive sells car insurance, and used to calculate consumers’ insurance premium based on their credit score, assuming that those of us who were responsible spenders, were also responsible in other areas of our lives, including how we drive. This represented losses to Progressive every time they insured a person smart with their money but wreckless with their driving, and also led them to overcharge a person burdened by loans on a house they just bought, but great at the wheel. The solution:  yes, ladies and gentlemen, the IoT!

When Progressive realized that credit score and driving behavior were not always correlated, they began to offer their clients a “Snapshot”, which consists on having a small device plugged into the USB port of their car, and monitoring how they drive in order to calculate a more accurate insurance premium. This device is in constant interaction with Progressive’s Control Center, where they keep track of how you’re driving. Things such as distance driven, how many times you hit the brakes hard, and the number of miles you drive between midnight and 4am, make you a higher risk client, and increase the premium they will charge you next year. But, for example, if you mostly use your car for your short, daily commute to the office, and are, in general terms, a responsible driver, the IoT could represent a saving of up to 30% on your car insurance. And, let’s be honest, who doesn’t want to save some cash without drastically changing their daily habits?

The question now being asked is if this will become an industry standard. Assuming we’re responsible drivers, we will be lured by the possible discount we can get from our insurance company if they monitor our driving. But, even though Progressive says that they are not tracking your speed or your location, the fact that if they wished they could makes us a little iffy about it.  In the end, as with most debates concerning IoT, it all boils down to how protective we are with our privacy. But, if we trust the companies with which we do business, as we have been doing for centuries, the IoT will allow them to tailor their product offering to our specific need; which, in the end, will do more good than harm in our daily lives.