Wearable Technology and the Insurance Sector

by nickk on October 27, 2014

Even a few years ago the concept of wearable technology was an alien one; apart from a few functions on a wristwatch – there was little chance of any device being adapted to fit the human body. Today wearable technology is becoming ever more practical. The Google Glass project is perhaps the most famous example to come out of this sector but there are plenty of other projects waiting in the wings and coming to fruition. Major fashion brans are even working on making this technology appealing in terms of aesthetics now.

Opportunities For Insurers

Wearable technology, once you peer under the surface of all these impressive gadgets, is really about collecting and generating data.

So for example with Google Glass; an insurer could equip their field adjusters or other specialists with the glasses. This would enable accurate fast and safe surveys of accident conditions and that data could be transmitted instantly to other interested parties for claims to be processed. The data would be automatically indexed with identifying information (like times, dates, GPS positions, etc.) and it would be very simple to take notes and update them against the video.

Google Glass could also be used from a customer perspective; for example in the field of long distance lorry driving – the driver could be required to wear the device on their journey. It would record the whole journey and any other high-value data (such as speed, driver’s eye position, cornering suitability, etc.) and in the event of an accident – this data could be assessed for liability and claims processing.

In high risk industries individuals could end up wearing suits of wearable technology materials that gauge their overall safety and in the event of injury assess fault too. This could be extended so that different wearable technology suits were provided to outpatients receiving physical therapy – the therapist could check to see if positions, postures, repetitions, etc. were being performed and if they were being performed correctly.

Insurable Risk

The flip side of data tracking, monitoring and collecting is that it’s going to bring a whole new category of risk. Wearable technology data leaks have the potential to be catastrophic to individuals. If your new work suit’s data shows that you’re having an extra-marital affair (by GPS locating the data of your partner’s abode as the main location of your lunchtime work visits) and this data is published…

Larger volumes of data loss could be catastrophic for business or industries instead. The insurance sector is going to need to examine the new levels of risk accordingly and develop new policies to meet these risks appropriately.

Glass and Insurance

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There’s a new buzz word that’s starting to make itself felt. That buzzword is “The Internet of Things” but what does it mean? And more importantly what impact is the “Internet of Things” going to have on insurance.

The Internet of Things

The Internet of Things is a wide term which really covers the idea that you might want to (and be able to) connect non-computing devices to the internet. For example; you might want to be able to put your dinner in the oven before you leave home but you might need to be able to control when the dinner starts cooking based on when your last meeting ends.

The internet of things would allow you to put a chip (computer not potato) in the oven. This would connect it to the internet. You could then use your mobile phone to let this chip know that your meeting was over and it was time to start cooking the coq au vin.

In essence the internet of things is anything at all which might be connected to the internet. It will lead to “smart devices” in a similar way that the last decade led to “smart phones”.

How Might This Impact Insurers?

Home Appliances

Imagine that you could connect someone’s fridge to the internet and then monitor the contents. If you were a health insurer; you could then offer the owner benefits if they kept their fridge stocked with healthy fruit and vegetables and perhaps penalties if their fridge overflows with lard and burgers.

Carpets

Carpets could be programmed to detect if an elderly relative falls on the floor or if a burglar has stepped into your hallway. Insurers could take this data and reduce senior-care insurance costs or home insurance premiums.

Home Management

Thermostats, window controls, etc. could all be plugged into the internet of things. Careful control over the humidity or moisture content in the air of a house can prevent dry rot and other issues. Again premiums could be tweaked for householders that agreed to meet and abide by their insurers standards.

Physical Fitness

Once again, health insurers should be salivating at the prospect of exercise equipment that reports on the user’s commitment. Failing to do the right amount of work on the treadmill or exercise bike in a certain period could have significant impacts on a consumer’s premiums.

There are dozens of other potential uses for the internet of things. What the real implication for insurers is is simple. It’s the idea that there will be much more data available for insurers to access risk on. This should lead to ever more personalized products and better value (and profitability) from policies as a whole.

Insurers Internet of Things

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Technology that Combats Insurance Fraud

by nickkSeptember 29, 2014

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Automotive Insurance Premiums to Fall Again?

by nickkSeptember 1, 2014

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3-D Printing and Insurance – More Technological Disruption?

by nickkAugust 18, 2014

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The End of the Insurance Underwriter?

by nickkAugust 4, 2014

Technology brings change; it’s inevitable. Most change is positive; it makes us more productive, it allows us to do things more safely, it brings convenience but there is also disruptive change. A recent paper from Oxford University sheds light on a change that some in the insurance industry will not appreciate; “The Future of Employment: […]

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Nanotechnology and Insurance

by nickkJuly 31, 2014

There are many fields of emerging risk in technology but few are as fascinating as nanotechnology. Nanotechnology involves materials which are less than 1 billionth of a meter long. A human hair is about 800 times thicker than the average nanomaterial. It’s not too long ago that nanotechnology was really the stuff of science fiction. […]

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Consumer Insurance Companies – About to be Rated?

by nickkJuly 21, 2014

There’s no doubt that technology has the power to help the insurance industry. This week, we’re left wondering if a new development may hinder some insurers and boost the profiles of others. Traditionally insurers have been rated on their financial performance and perhaps their stockholders. These measurements are great if you want to invest in […]

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Is It Time for Your Insurance Brokerage to Ditch Google?

by nickkJuly 7, 2014

Google’s rise to the pole position of search engines was nothing short of meteoric. Many have tried to dominate this space on the internet and many have failed. Google won’t acknowledge that the word “Google” has become a verb because it would damage their trademark but the name has become truly synonymous with searching for […]

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