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February 09, 2019

IoT for Insurance - The Attack of the Cool Technology

Philip L. Schwartz

Philip L. Schwartz
Chief Data Officer, Senior Technical Staff Member/International Business Machines (IBM)

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We are in the fifth year of Gartner’s hype curve on IoT. One can argue exactly where we are on the curve. I believe we have moved past the Peak of Inflated Expectations. We have established:

  • Common IoT architectures. We understand that an IoT architecture needs to be designed to support both short-term and long-term business objectives.
  • Many personal and commercial insurance solutions, ranging from connected home and connected auto to a safer workplace and elder care.
  • We have taken great steps forward in the area of security. We now have solutions that are capable of supporting enterprise level IoT security.
  • We can now responsibly support the requirements driven by GDPR and other PI requirements and restrictions.
  • We see advanced interest and early implementations of machine learning and cognitive technology within use cases.
  • We are moving forward in our understanding of the patterns needed to support the utilization and integration of IoT data and analytics into legacy systems. 
  • We have seen the development of a number of successful, to-scale IoT data lakes/data reservoirs.
  • We have repeatable patterns for the use of multiple device types to execute analytics on the edge.

This is great progress.  However, the Trough of Disillusionment looms ahead. What is needed for us to continue to move forward?


Time and Market Leaders  

  • The adoption of IoT significantly varies use case by use case on a geo-level. We see a much higher adoption of mature PAYD, PHYD, PWYD (pay as you drive, pay how you drive, pay where you drive) use cases in Europe compared to the United States. Conversely, the US seems to be leading the globe in the implementation of commercial insurance safer workplace use cases. The uneven adoption pattern has been driven by the recognition of insurance carriers that it is easier for them to monetize selected use cases. For example, Connected Auto can be monetized in Italy by the fraud detection benefits that are provided. That is not true in other parts of the world.

Time will allow global carriers to explore the business value of new use cases. 

  • Who wants to go first?  Many insurance carriers have gone to market with exclusive device vendor partnerships around Connected Home. Many followed after the first couple blazed the trail and showed customer adoption. We need global carriers to take that first step, moving forward with new use cases that they can monetize within their geo and customer base. 

Comments? You can contact me directly via my AdvisoryCloud profile.

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