Tag Archives: big tech

Will IoT Upend Insurance? [Hint: NO!]

So many gurus and their ilk are looking for, hoping for, any technology or group of technologies to “disrupt” or otherwise upend the insurance industry. One of the latest hopes for transforming the insurance industry is IoT: the Internet of Things.

Unlike mobility, social media, cloud computing, big data and associated data science-driven analytics, or blockchain, IoT will definitely upend the insurance industry. The IP-enabled sensors will help people stop or reduce losses before they occur or soon after the losses occur. Traditional insurers will run for the hills because their industry will be in shambles. Shambles, I tell you !

Nirvana achieved!

The reality is uglier, of course

There certainly are an expanding number of IoT devices appearing in homes throughout the country. A veritable panoply of devices popping up in the basement, the attic and every room in between. Even the front door bell !

(BTW, is anyone with an IoT door lock looking forward to the day when the cloud service maintaining the door lock goes down? Perhaps when you have bags of groceries in your arms or after a long day at work, and you just want to get into your OWN HOME?)

The reality is a tad uglier, of course, than the gurus tell us, as reality always is. The IoT-laden Pom Pom wavers neglect to pay as much attention to the ugly realities. Don’t you just want to tell them what they can do with their Pom Poms?

Ugly realities of IoT

The panoply of IoT devices is actually an expanding zoo of varied species that are blind to the existence of the other species in the zoo. The IoT devices don’t ‘talk to each other.’ There are no standards, including data standards that would enable the IoT devices to actually be …., well, useful. (Yes, I know that Apple, Amazon and Google are working on this issue – but today’s situation is like cooking some hot dogs and finding out that the mustard is on the shopping list but that none is actually in your refrigerator.)

Beyond not being part of a coherent integrated whole for the homeowner, each of the IoT devices represents a wonderful opportunity for hackers to spy on the family, and the devices create opportunities for distributed denial of service (DDoS) attacks on other targets by using the IoT devices as cyber-zombies or for other sorts of havoc (if the IoT device can alert the homeowner about water leaking, why can’t a hacker cause the IoT device to actually start the water leaking?)

This brings us to another superb attribute of the IoT devices: Their security truly sucks. (That’s the technical term, folks; what can I tell you?) Can you (easily) reset the password on each of your IoT devices? Will the IoT device use two-factor authentication?

See also: Insurance and the Internet of Things  

Big Tech is coming (NOT)

But, hey, insurers should still fear the Big Tech companies coming into the loss-prevention space, right?

Why not fear these non-insurance players? Assuming security, privacy and trust become commonplace with each and every IoT device (and how many decades before that happens?), the firms offering loss prevention bundled with the IoT device (i.e.. warranty on steroids) only have to, at a minimum:

  • Augment their devices with networks of vendors that can repair/replace the IoT device OR the appliance itself
  • Ensure the vendors are bonded or have other insurance in case they don’t show up when they say they will or don’t actually do the repair/replace job the homeowner expects
  • Instill confidence in the homeowners that the vendors can be trusted to come into their homes in the first place

I imagine there might be Big Tech or platform players who want to get into the loss-prevention business. (OK, I can’t.) They might erroneously believe that setting up a FAQ web site will do the trick. Have a problem with the IoT device/appliance? Not a problem – click to this FAQ web site. And let us know if the FAQ page(s) were helpful.

Oh, and augment that FAQ web site with voice-recognition units (VRUs) or chatbots that stick to their scripts. Yup, that’s the ticket: Make it hard for someone with a broken IoT device/appliance to actually talk to a human. That will endear the customer to the firms providing the service.

Moreover, I hope that firms realize that if anything goes wrong repairing/replacing the IoT device/appliance, they will be sued. Oh, wait, that’s another opportunity for traditional insurance – these firms will need to purchase liability insurance (drat it all).

Why not upend the insurance industry?

What has the insurance industry ever done except keep society, families, individuals and businesses operating in times of war, famine, plague and recessions?

What a horrendous societal effect: helping clients manage or mitigate risk in a legal, regulatory manner through the centuries of civilization.

See also: Global Trend Map No. 7: Internet of Things  

Don’t insurers realize that an integral part of their value-add is helping VCs and other investors (and conference organizers) to generate revenue off the insurance industry? Why can’t the insurance industry accept that even these human vampires have a right to exist and profit? Oh, why??

What will happen? Really?

Will IoT upend the current insurance industry? Will being able to prevent losses upend the current insurance industry?

No.

The league tables of P&C insurers (whether personal or commercial P&C) will remain as they are for many, many, many decades to come.

I believe that traditional insurers will create or strengthen their own networks of vendors to repair/replace either IoT devices or appliances and potentially bundle lower premiums (where insurance regulators allow).

So, sorry … no upending or disrupting of the insurance industry. Not an iota of upending.

This article was originally published on Rabkin’s Opinions.

Too Much Tech Is Ruining Lives

Just four years ago, I was a cheerleader. Social media was supposed to be the great hope for democracy. I know because I told the world so. I said in 2014 that no one could predict where this revolution would take us. My conclusion was dusted with optimism: A better-connected human race would find a way to better itself.

I was only half right: Nobody could have predicted where we have ended up. Yet my optimistic prognosis was utterly misguided. Social media has led to less human interaction, not more. It has suppressed human development, not stimulated it. As Big Tech has marched onward, we have regressed.

Look at the evidence. Research shows that social media may well be making many of us unhappy, jealous and — paradoxically — antisocial. Even Facebook gets it. An academic study that Facebook cited in a blog post revealed that when people spend a lot of time passively consuming information, they wind up feeling worse. Just 10 minutes on Facebook is enough to depress — clicking and liking a multitude of posts and links seems to have a negative effect on mental health.

See also: The World Doesn’t Need Silicon Valley  

Meantime, the green-eyed monster thrives on the social network: Reading rosy stories and carefully controlled images about the social  and love lives of others leads to poor comparisons with one’s own existence. Getting out in the warts-and-all real world and having proper conversations would provide a powerful antidote. Some chance! Humans have convinced themselves that catching up online is a viable alternative to in-person socializing.

And what of consumer choice? Former Google design ethicist Tristan Harris noted in an essay on how technology hijacks people’s minds, that it is actually designed to give us fewer choices, not more. When you do a Google search for a restaurant, for example, you are presented with a limited set of choices, with advertisers appearing at the top of a list. We rarely browse to the second page of search results. Harris likened this to what magicians do: “Give people the illusion of free choice while architecting the menu so that they win, no matter what you choose.”

We are becoming unthinkingly reliant — addicted — to ease of use at the expense of quality. We are walking dumpsters for internet content that we don’t need and that might actively damage our brains.

The technology industry also uses another technique to keep us hooked: feeding us a bottomless pit of information.

This phenomenon’ is the effect Netflix has when it auto-plays the next episode of a show after a cliffhanger and you continue watching, thinking, “I can make up the sleep over the weekend.” The cliffhanger is, of course, always replaced by another cliffhanger. The 13-part season is followed by another one, and yet another. We spend longer in front of the television, yet we feel no more satiated. When Facebook, Instagram and Twitter tack on their scrolling pages and update their news feeds, causing each article to roll into the next, the effect manifests itself again.

Perhaps we should go back to our smartphones and, instead of playing Netflix or sending texts on WhatsApp, use their core function. Call up our friends and family and have a chat or — better — arrange to meet them.

Meanwhile, Big Tech could carve an opportunity from a crisis. What about offering a subscription to an ad-free Facebook? In return for a monthly fee, searches would be based on quality of content rather than product placement. I would pay for that. The time savings alone when booking a trip would be worth it.

See also: No, AI Isn’t Taking Over Firms’ Decisions  

Apple pioneered the Do Not Disturb function, which stopped messages and calls waking us from sleep, unless a set of emergency criteria were met by the caller. How about a Focus Mode that turned off all notifications and hid our apps from our home screen, to ease the temptation to play with our phones when we should be concentrating on our work, or talking to our spouses, friends and colleagues?

In the 1980s, the BBC in Britain ran a successful children’s series called “Why Don’t You?” that implored viewers to “turn off their TV set and go out and do something less boring instead,” suggesting sociable activities that did not involve a screen. It was wise before its time. The TV seems like a puny adversary compared with the deadening digital army we face today.