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📡 '''Internet of things (IoT)''' refers to the network of physical devices — sensors, wearables, connected vehicles, smart home systems, and industrial monitors — that collect and transmit data over the internet, and whose output is increasingly shaping how [[Definition:Insurance carrier | insurance carriers]] assess, price, and manage [[Definition:Risk | risk]]. In an insurance context, IoT transforms traditionally static underwriting information into a continuous stream of real-time behavioral and environmental data. This shift is central to the broader [[Definition:Insurtech | insurtech]] movement, enabling products and business models that were not feasible when insurers could only evaluate risk at the point of [[Definition:Underwriting | underwriting]] or [[Definition:Renewal | renewal]].

🔌 Carriers integrate IoT data across multiple [[Definition:Line of business | lines of business]]. In [[Definition:Auto insurance | auto insurance]], [[Definition:Telematics | telematics]] devices and smartphone apps record driving behavior — speed, braking patterns, mileage — and feed it into [[Definition:Usage-based insurance (UBI) | usage-based insurance]] models that adjust [[Definition:Premium | premiums]] based on actual driving habits. In [[Definition:Commercial property insurance | commercial property]], water-leak sensors, fire-detection systems, and climate monitors help [[Definition:Policyholder | policyholders]] and insurers catch hazards before they become [[Definition:Claim | claims]]. [[Definition:Health insurance | Health]] and [[Definition:Life insurance | life]] insurers use wearable fitness trackers to incentivize healthier lifestyles, while industrial IoT platforms monitor equipment in real time to reduce [[Definition:Workers' compensation insurance | workplace injuries]] and [[Definition:Business interruption insurance | downtime]].

🎯 The promise of IoT for insurance extends well beyond more accurate [[Definition:Pricing model | pricing]]. By detecting problems early, connected devices shift the carrier's role from reactive claims payer to proactive risk partner — a transition often described as moving from "detect and repair" to "predict and prevent." This dynamic reduces [[Definition:Loss ratio | loss ratios]], deepens [[Definition:Customer retention | customer engagement]], and opens the door to entirely new product categories such as [[Definition:Parametric insurance | parametric]] triggers tied to sensor readings. Challenges remain around data privacy, standardization, and the sheer volume of information flowing into legacy systems, but carriers that master IoT integration are positioned to redefine the value they deliver.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Telematics]]
* [[Definition:Usage-based insurance (UBI)]]
* [[Definition:Predictive analytics]]
* [[Definition:Parametric insurance]]
* [[Definition:Insurtech]]
* [[Definition:Loss control]]
{{Div col end}}

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