The rapid proliferation of the Internet of Things (IoT) has created millions of devices measuring virtually anything in the physical world, from weather conditions and vehicle telematics to personal fitness activity and vital health signs. Over the last five years, there has been a significant uptick in the reliance on personal smart devices to help simplify and enhance consumer life. From quantifying the number of miles a user has run to controlling home thermostats, the IoT is becoming a necessity. Data is king, and this opens up a whole new world of possibilities for the insurance industry.\nAs IoT is transforming daily life, insurers must also adapt to running a business in the age of the connected customer. Today\u2019s digitally native consumers expect higher levels of engagement and these expectations are spurring change at an unprecedented rate. As a result, insurance companies are identifying new ways to improve customer experience and turning policies for the first time into living, breathing products. Gone are the days of the insurance policy that is only given thought twice in its life: at point of purchase and point of claim. Thanks to emerging technologies like the IoT, the insurance industry is experiencing a digital transformation that allows insurers to turn traditional peace of mind into more frequent value-add touchpoints with policyholders.\u00a0\nHow IoT is predicting risk \nIoT fosters constant connectivity and brings with it an influx of data which allows insurance companies to customize the customer experience. One way that interaction is changing is the way insurers are moving from a reactive to a predictive service model. Thanks to activity trackers, telematics and other sensor data, insurers can measure risk in the physical world for the first time with so much accuracy that once historic threats can be anticipated and even prevented in some cases. A great use case is the way automotive insurers have started to tap into technology to help policyholders avoid dangerous driving routes. By combining weather data and a car\u2019s location, insurers can alert drivers of damaging weather conditions ahead, and re-direct them to a safer route, thus avoiding a potential insurance claim. Insurers have gone from merely reacting to events to predicting outcomes and becoming an integral part of the solution.\nMaking sense of IoT data\u00a0 \nTo achieve this level of predictability, insurance companies need to orchestrate a solid data strategy. Increased computing power makes it easier to pull large amounts of data, but it\u2019s important to assess what types of data are needed to better inform policies and enhance the overall customer experience. Data compiled from social media posts can inform insurers on the best time to approach a customer with a particular coverage offering. For example, if a customer posts about purchasing a new home, it might be the right time to reach out regarding a homeowner\u2019s policy. Not only does this data intelligence help insurance companies, but it provides customers with personalized and targeted coverage offerings that align with their current needs.\nBy understanding the facets of a customer\u2019s life, insurers will soon be able to paint a holistic picture and address future risks. This is contributing to another shift currently taking place in the insurance industry, particularly outside of the United States. \u00a0Traditionally siloed insurance offerings (e.g., auto, home, life, etc.) is beginning to intersect and inform one another in order to create singular policy offerings for customers. While regulatory restrictions limit how U.S. insurers can sell various products, places like South Korea, South Africa and the Philippines can offer bundled products that address every aspect of a customer\u2019s life.\nThe rise of insurance disruptors \nThe insurance industry is continuing to consolidate, enhance and customize offerings based on the IoT transformation, but insurers will have to go a step further if they wish to effectively compete. As mentioned earlier, insurers are starting to understand that they not only need to react to events by responding to claims, but they need to play an active role in preventing or minimizing risk from occurring in the first place. Due to the accessibility of IoT data, emerging players are starting to compete with insurance companies for the role of \u201cpredictive protector.\u201d There has been an influx of non-insurance companies starting to offer protection packages which look and feel like a typical insurance policy. Many insurers will have to embrace this shift and view it as an opportunity to explore partnerships with leading technology innovators to create the most dynamic policies.\nAs long as insurers continue to utilize data and IoT technology, they\u2019ll be able to stay ahead of the curve. Of course, technological advances can pose challenges as it relates to data management and new policy structures, but the pros outweigh the cons. Insurers who leverage data and machine learning tools can achieve more strategic underwriting, reduce risks and provide solutions to customers based on patterns. With more risks developing every day, the role of the insurer is becoming increasingly important as they help customers navigate issues with the help of predictive modeling. The IoT and big data are allowing insurers to provide more strategic, targeted and nimble policies and solutions for today\u2019s sophisticated customer.