Smart Agencies: Keeping Up in the Age of the 'Internet of
Things' | |
We live in a society increasingly ruled by innovations.
The trend towards "smart" technology continues to
revolutionize the way people live in smart homes, drive smart cars and
interact with each other via social media on their smart phones. This
exponential growth in the tech sphere has a whole host of implications for
the future of personal lines of insurance. Yet all too often our industry
finds itself struggling to keep up. So how should you respond? Simple: smart
technology demands smart agencies. Smart Home: Using innovation to harness insights of a risk We live in the age of the Internet of Things: devices
connecting anything with an "on/off" switch to the internet
and/or each other. We see home alarm systems, light switches, security
cameras and thermostats being controlled remotely via a smartphone or
tablet. Having this level of connectivity means data is available in real
time about the condition and inner-workings of a remote location. But
perhaps this is just another tech gadget that will come and go before we
know it. Don't bet on it. Far from being a passing craze, it is
expected that there will only be a rise in these connections and available
data. Cisco projects there will be over 50 billion
connected devices in the world by 2020. This means the future of
smart homes gives rise to a unique opportunity for underwriting with a
continuous stream of data. This data is useful for the homeowner as it
provides conveniences in facilitating the mundane tasks of everyday life
but can also be an invaluable tool for insurers in assessing a real
property risk. The future of smart home technology includes a class of
products known as "Home Wellness Alerts". These alerts provide a
wealth of in depth knowledge that would be almost impossible to collect
otherwise. Alerts that are classified as loss control mechanisms give
information on the condition of a property, but they can also be used to
predict future risk. They communicate in real time to the property owner
and authorities to lessen the damage of a covered peril -- or
prevent the loss altogether. Some examples of the Home
Wellness Alerts being tested in the marketplace: - Water leak protection: sensors that detect
water leaks in the home
- Theft protection: motion sensors,
biometric for security (retina scans, facial recognition,
fingerprints)
- Ground Sensors: alert property owners
of shifts in the ground that may indicate mudslides or earthquakes
- Fortified Homes: advances in engineered
product to make homes resistant to hail, high winds and hurricanes
Leverage transformative technology The insurance industry is responding to the perils
of smart phone and tablets but does not always embrace their benefits.
Those same devices that are potential distractions can become invaluable
sales tools and policy servicing mechanisms. Harvesting data from the Internet
of Things via connected smart cars, tablets, smart phones,
smart homes, and (semi) autonomous vehicles can exponentially improve on
traditional rating factors such as credit, loss history, predicting future
risk -- even the handling of claims. The great news is that all this
information and much more is readily available via the Internet
of Things. The bad news is that insurers and agents are nearly always
late adopters of technology, so this data is not being harnessed. Infrastructure in the insurance industry is often lacking
when it comes to advances in technology. This lack of technological
infrastructure leads to lack of visibility and awareness which leaves a
panacea of potential loss circumstances looming unassessed. Lack of
transparency to these perils may limit the ability of agencies to fully and
adequately advise and insure clients. This gap is one that may give rise to
an E&O claim against an agency. Agents must be diligent in preparing
themselves for the new wave of smart technology. Strategic partnerships
that focus on the use of technology and innovations are a must in the
modern underwriting environment. It is incumbent on the industry as a whole
to "get smart" because in this sense tomorrow is already here.
And you should know by now the alternative to embracing your future. You're history. Larrye
Murrell is an assistant vice president, claims specialist with Swiss
Re Corporate Solutions and works out of the office in Overland Park,
Kansas. Insurance products underwritten by Westport Insurance Corporation,
Overland Park, Kansas, a member of Swiss Re Corporate Solutions. | 
