Data tracking about to change the way insurance companies do business, says Ping An tech fund

Ping An Global Voyager Fund, the US$1 billion global technology investment fund of Ping An Insurance, is exploring data analytic technologies as a potential investment area, as it sees the internet of things as the next big wave of innovation that could reshape the insurance sector.

Donald Lacey, managing director and chief operating officer of the fund, expects the internet of things to redefine the way that insurers have do business. One immediate impact is that insurers’ premium pool will get compressed.

“We really see the internet of things as having dramatic repercussions for the insurance sector. For certain lines of business, lower loss incidence and lower claims is likely to compress premiums, and may lead insurance companies to focus more on preventive services, as opposed to just collecting premiums and then paying claims,” Lacey said.

He said there are “many interesting ways for insurers to play”, or to transition their business model to compensate for reduced premium payments.

Business consultancy Gartner defines the internet of things as a network of physical objects that contain embedded technology to communicate or interact with their internal states or external environment.

The huge amount of sensor data made available from these devices will have a big impact on business insurance.