Our guest author Michael Mayr has been working for over 20 years in the IT services and consultancy sector in a variety of management positions and as a consultant to leading auto makers, energy suppliers, and financial service providers in the area of distribution and e-business solutions. As managing partner and principal consultant at iic solutions GmbH, he advises customers in relation to product innovations and developing new, cross-sector business models with the use of innovative technologies. You can follow Michael on Twitter or Xing.
The Internet of Things will change everything: it is estimated that over 6.5 billion objects will be connected to the internet by 2015. It is one of the biggest technological leaps of the last hundred years. According to estimates by Cisco, a huge market beckons; experts estimate that the global market over the next ten years will be worth 14.4 trillion dollars. General Electric has calculated that 46 percent of the global economy can benefit from the Industrial Internet.
For many industries, this is opening up a growth market in which new business models and customized products and services become possible. I am convinced that this technological change will also have a huge impact on insurers and assistance service providers (by “assistance” I mean a service that immediately and directly helps the customers of insurers and other companies; the basic concept of assistance involves organizing or providing emergency help around the clock wherever it is needed).
The insurance sector is currently operating in a difficult market environment: companies are facing competitive pressures, increasing regulation, growing customer willingness to switch insurer, and low interest rates in the capital markets.
Against this background, here are eight reasons why the insurance sector should get to grips with the potential of the Internet of Things now:
1. New opportunities, new risks
While the Internet of Things holds out the prospect of helping to resolve the social challenges of our time and creating added value for individuals and companies, it also throws up new risks (the core of insurance business models) and threats for which there are currently no standard operating scenarios or security concepts. For example, attacks on transportation, logistics or healthcare ecosystems or the failure of individual constituent components might have a major effect on households, businesses, and even whole countries.
However, the Internet of Things will also change existing risk situations. Driver assistance systems and autonomous driving will significantly reduce the number of accidents and the amount of damage they cause in future. On the other hand, the issue of product liability will become more prominent. Insurers should study these threats and changed risk situations in detail and examine their effects on existing and future business. Read more…