Aon’s specialised cargo insurance protection product integrated with Internet of Things (IoT) capabilities is a game-changer – especially for cargo insurance, which can take months to identify and settle, says analytics company GlobalData.
IoT capabilities have become increasingly important to enterprises in recent years, which has allowed the IoT market to grow from US$586 billion in 2019 to $622 billion in 2020. As the ecosystem of IoT devices develops, it creates an opportunity for insurers to integrate the technology and streamline their claims process. Furthermore, due to its capabilities and endless potential, GlobalData forecasts that the IoT market will reach a value of $1,077 billion by 2024, representing a compound annual growth rate of 13 per cent compared to 2020.
Aon is using IoT to monitor the temperature of vaccines on marine cargo through a partnership with insurtech Parsyl. Covid-19 vaccines demand strict temperature controls as exposure to temperatures outside the range prescribed by manufacturers can render them useless. According to the World Health Organization, around half of the Covid-19 vaccines distributed around the world go to waste, in large part because of a failure to properly control storage temperatures.
Settling claims much more rapidly
Jazmin Chong, Insurance Analyst at GlobalData, commented: “Through Aon’s insurance product, if vaccine temperatures drop outside the pre-established temperature range, policyholders are entitled to a claim payout. Aon’s product is a game-changer as the insurer will be able to establish clear trigger points and have constant access to this information, therefore being able to settle a claim much more rapidly.
“IoT usage also provides policyholders with tracking information for vaccine cargo. Aon’s and Parsyl’s efforts represent an important usage of IoT in the insurance market, as well as offering insight into how vaccine providers are trying to mitigate risk.”
This is also relevant in light of the March 2021 Suez Canal blockage. While the blockage only lasted six days, it is expected that the incident will impact global supply chains for months..
Chong added: “Going forward, IoT devices will play an integral role in the insurance industry. Their usage will offer a more creative way of protecting against certain risks and streamlining the claims process – benefits that will help drive uptake.”