Skip to main content

Tackling the IoT opportunity for commercial lines insurance

The Internet of Things connects the world in truly exciting ways. Insurance carriers that capture the opportunities of IoT stand to boost revenues and reduce claims expenses.

The Internet of Things (IoT) allows insurers to develop new products, open new distribution channels, and extend their roles to include prediction, prevention, and assistance. Required preconditions for IoT technology to take off are already in place: data is omnipresent, computing power is rapidly increasing, and connectivity technology is steadily maturing and becoming standardized. And the value potential is real. By 2025, the total economic value created through IoT could reach $11.3 trillion across various sectors and application areas.

To succeed, insurers must bring together technology and connectivity partners as well as powerful ecosystem participants to develop compelling use cases and application areas. Which application areas are most promising in commercial lines insurance is becoming clearer—from drones that survey the aftermath of natural disasters to wearable tech that monitors alertness and vital signs in the workplace, or even sensors that prevent damages in commercial buildings. As maturity grows and the cost of services continues to fall, the value for customers and insurers alike will increase considerably. Therefore, insurers should begin building their long-term capabilities now to expand their market positions and develop innovative services for their future customers—and possibly even participate in the development of market standards in the years ahead.

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at:

About the author(s)

Sylvain Johansson is a partner in McKinsey’s Geneva office; Johannes-Tobias Lorenz is a senior partner in the Düsseldorf office, where Stefan Spang is a senior partner; and Maximilian Straub is an associate partner in the Zurich office.

The authors wish to thank Anne Dreller for her contributions to this article.

Related Articles