Internet of Things (IOT), Risks and Emerging Opportunities in Insurance
Every day that passes, the advances in digital technology create hundreds of products that incorporate the internet to its operation. Remote control (drones and cars without driver), security in our homes activated and monitored with cameras from the cell phone, heating or ignition Of the oven to prepare the dinner, the biometric reading in mirrors or the steering wheel of cars to protect the driver, the entrance to private or restricted areas. Identification of risk subjects at airports through their evaluation of stress, tension, perspiration or cardiac shakes. New watches and sportswear that allow monitoring of different vital signs and can also be tracked and evaluated at a distance.
A permanently connected network of new products, machines, people and organizations is a technological advance that will have a strong impact on insurance and its relative static horizon. These consumers have constant expectations of technological change, buy, and carry out transactions through different channels, smartphones, tablets, Smart TV, etc.
9 of Top 10 underwriters are in the final phase of development of Insurance based on their use, because it is estimated that by 2020, 50% of cars will have advanced driver assistance systems or driver diagnostic systems (Today there are an estimated 155 million cars in North America with these controls that send data on driver behavior or habits with a positive impact on your insurance coverage cost.) Its installation in trucks has reduced the factors generating accidents and accidents on average by 40%. Smart car is a critical factor for the P & C product. Because it will force insurers to develop strategic partnerships with technological developers or they will be unable to generate added value for the customer (competitive premiums and protection and prevention instead of restitution).
Smart homes condition insurers to a holistic view of risk, since the client can monitor for himself the security of his home, purchases needed for supply, energy and heating control, maintenance of The same, or the chances of a fire or theft incident. This will imply that insurance companies understand these ecosystems in the hands of global players such as GE, Philips, and others, and use this data to innovate products with a greater value proposition for the customer. An approach based on the interaction of transactions and not so much in the accidents. Value added is born of intelligence in the analysis of these data in real time and the value proposition that captures the client, anticipating and preventing their risks. Many companies use drones to evaluate damage after an incident, which could imply an efficiency increase in evaluation and costs of 40-50%.
The connected individual
The devices that now allow monitoring of blood pressure, blood glucose, cardiac dysrhythmias or a possible fainting or loss of consciousness, can inform on line the emergency to their social work so that it is taken care of urgently and avoid consequences or greater economic disbursements. A great help for the elderly who in natural and non-invasive way, can be assisted by your family or your doctor to an alert triggered from your device. This would imply that prepayments would incur lower costs and should generate another type of added value in their service to justify their high costs in health insurance.
Everything presses towards a new business model that will demand
A rigorous segmentation of clients based on the generation of information from their own devices, with a holistic view of Auto, Health, Life and Property.
Excellence in the understanding and anticipation of risk events, because the trend will be to lower the premiums and will have to achieve alternative models of results generation.
Analysis and Intelligence of data
No longer has the statistics, nor the actuarial analyzed alone. It should also analyze the data in a simultaneous way to the events, which implies the control and management of information that technological advances can provide online and with simulation in real time to prevent and protect large losses.
IoT generated a new cultural insurance standard
Competing in this context will involve a new business vision, a correct governance of inherent, residual and emerging risks in products and capital management, a strategic planning process that incorporates the future into the present operational of the company with a permanent innovation of its products based on the digital and technological changes.
Technology advances by leaps and bounds, innovation accelerates and generates disruption in traditional insurance models, opening up new challenges and growth frontiers. But are the insurance companies acting with the same speed? The deconstruction of old paradigms and a development without limits and with own language overwhelm the Industry, generating an unparalleled opportunity for who is in tune with the times and accept the great challenge.
The privacy and legal security of the data generated by the different devices will push individuals and companies to carefully analyze these risks. IoT platforms allow hackers to take advantage of the vulnerabilities of data transmission across the network and different devices, as the manufacturers do not focus on security but reduce costs for mass selling.
The variety and volume of personal data that will be potentially available to third parties is enormous, with the risks involved. These risks should impact on a timely and detailed analysis of the legal risks of individuals and companies, a regulatory scrutiny or the generation of a new framework of legislation for these new actors of the IoT system.
All this new generation of data will allow companies to know the behavior and changes in life habits that the insured person may have, with the risk of an arbitrary manipulation of the same, and / or discrimination in the coverage of risks of commercial companies or Industrial companies that may have by mistake or by strategic decision an aggressive performance in the practice of their businesses.
The legal space is a collateral risk to all these digital and technological advances, because neither governments nor regulatory bodies are going to change. This will affect individuals, insurance companies, companies and entire communities until appropriate regulations are in place that will protect and balance the entire global society.