The Internet of Things – Evolution or Revolution – AIG White Paper
Article Synopsis :
The proliferating reach and influence of the internet and connected devices along with the broad adoption of Internet of Things (IoT) technologies is expected to revolutionise the way carriers market and sell their products to customers and businesses. This presents a unique opportunity as adoption of IoT has the potential to open the gates of a new growth market for carriers.
The Internet of Things is expected to revolutionise the way insurers market, sell and service their products to customers
In part 1 of the IoT white paper titled “The Internet of Things: Evolution or Revolution”, the AIG team explain what is IoT , how it is slowly getting mainstream, what are the key risks involved and what is the current state of its adoption in Europe, United States and Asian markets. The white paper predicts that the range of connected objects by 2020 will be 40 to 50 billion, and will include everything from cups and pens, to homes, cars, and industrial equipment. Along with providing readers with current examples of how certain industries have begun to use IoT, the white paper also identifies four key areas where they are applying IoT:
- Safety
- Efficiency
- Data-Driven Decision Making
- Infrastructure
The report also highlights the three biggest risks that will accompany IoT :
- Privacy
- Cybersecurity
- Liability
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Digital Insurer's Comments
IoT presents a huge opportunity for developing new distribution models, product innovation and enhancing the customer experience. But as it is new territory for many carriers, they also need to understand and manage the inherent risks it presents.Furthermore, insurers will face competitive pressures from non-insurance tech players who have heavily invested in developing the IoT ecosystem such as Google, Apple and Samsung. These tech giants have an upper hand in the IoT space as they have a strong command over the data generated by the IoT ecosystem. Google has already ventured into Auto insurance distribution and once it is convinced about the profitability, it will not likely hesitate to enter other insurance lines. How will carriers respond to these competitive pressures?
Managing data is also another big challenge for those entering the IoT landscape. Managing potential data breaches and maintaining the privacy and financial security of customers will be key for success. Carriers who get ahead of the game and who can spot and leverage the many opportunities within the IoT ecosystem whilst managing the execution risks, will be those that succeed in this new territory.
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About the Author
Hugh Terry
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Hugh Terry
CEO
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