Tag Archives: WiFi

1 Myth, 2 Truths, 5 Hot Trends in Health IT

There is a myth out there that healthcare providers are unwilling to adopt new technology. It’s just not true. In the last few months, I have spoken to dozens of healthcare leaders at hospitals both small and large, and I am amazed at their willingness to understand and adopt technology.

Pretty much every hospital CEO, COO, CMIO or CIO I talk to believes two things:

With growing demand, rising costs and constrained supply, healthcare is facing a crisis unless providers figure out how to “do more with less.”

Technology is a key enabler. There is technology out there to help save more lives, deliver better care, reduce costs and achieve a healthier America. If a technology solution solves a real problem and has a clearly articulated return on investment (ROI), healthcare isn’t that different from any other industry, and the healthcare industry is willing to adopt that technology.

Given my conversations, here are the five biggest IT trends I see in healthcare:

1. Consumerization of the electronic health record (EHR). Love it or hate it, the EHR sits at the center of innovation. Since the passage of the HITECH Act in 2009—a $30 billion effort to transform healthcare delivery through the widespread use of EHRs—the “next generation” EHR is becoming a reality driven by three factors:

  • Providers feeling the pressure to find innovative ways to cut costs and bring more efficiency to healthcare delivery
  • The explosion of “machine-generated” healthcare data from mobile apps, wearables and sensors
  • The “operating terminal” shifting from a desktop to a smartphone/tablet, forcing providers to reimagine how patient care data is produced and consumed

The “next generation” EHR will be built around physicians’ workflows and will make it easier for them to produce and consume data. It will, of course, need to have proper controls in place to make sure data can only be accessed by the right people to ensure privacy and safety. I expect more organizations will adopt the “app store” model Kaiser pioneered so that developers can innovate on their open platform.

2. Interoperability— Lack of system interoperability has made it very hard for providers to adopt new technologies such as data mining, machine learning, image recognition, the Internet of Things and mobile. This is changing fast because:

  • HHS’s mandate for interoperability in all EHRs by 2024 means patient data can be shared across systems to enable better care at lower cost.
  • HITECH incentives and the mandate to move 50% of Medicare payments from fee-for-service to value-based alternatives by 2018 imply care coordination. Interoperability will become imperative.
  • Project Argonaut, an industry-wide effort to create a modern API and data/services sharing between the EHR and other systems using HL7 FHIR, has already made impressive progress.
  • More than 60% of the proposed Stage 3 meaningful use rules require interoperability, up from 33% in Stage 2.

3. Mobile— With more than 50% of patients using their smartphone to monitor health and more than 50% of physicians using (or wanting to use) their smartphone to monitor patient health, and with seamless data sharing on its way, the way care is delivered will truly change.

Telemedicine is showing significant gains in delivering primary care. We will continue to see more adoption of mobile-enabled services for ambulatory and specialty care in 2016 and beyond for three reasons:

  • Mobile provides “situational awareness” to all stakeholders so they can know what’s going on with a patient in an instant and can move the right resources quickly with the push of a button.
  • Mobile-enabled services radically reduce communication overhead, especially when you’re dealing with multiple situations at the same time with urgency and communication is key.
  • The services can significantly improve the patient experience and reduce operating costs. Studies have shown that remote monitoring and mobile post-discharge care can significantly reduce readmissions and unnecessary admissions.

The key hurdle here is regulatory compliance. For example, auto-dialing 9-1-1 if a phone detects a heart attack can be dangerous if not properly done. As with the EHR, mobile services have to be designed around physician workflows and must comply with regulations.

4. Big data— Healthcare has been slower than verticals such as retail to adopt big data technologies, mainly because the ROI has not been very clear to date. With more wins on both the clinical and operational sides, that’s clearly changing. Of all the technology capabilities, big data can have the greatest near-term impact on the clinical and operational sides for providers, and it will be one of the biggest trends in 2016 and beyond. Successful companies providing big data solutions will do three things right:

  • Clean up data as needed: There’s lots of data, but it’s not easy to access it, and isn’t not quite primed “or clean” for analysis. There’s only so much you can see, and you spend a lot of time cleansing before you can do any meaningful analysis.
  • Meaningful results: It’s not always hard to build predictive analytic models, but they have to translate to results that enable evidence-based decision-making.
  • Deliver ROI: There are a lot of products out there that produce 1% to 2% gains; that doesn’t necessarily justify the investment.

5. Internet of Things— While hospitals have been a bit slow in adopting IoT, three key trends will shape faster adoption:

  • Innovation in hardware components (smaller, faster CPUs at lower cost) will create cheaper, more advanced medical devices, such as a WiFi-enabled blood pressure monitor connected to the EHR for smoother patient care coordination.
  • General-purpose sensors are maturing and becoming more reliable for enterprise use.
  • Devices are becoming smart, but making them all work together is painful. It’s good to have bed sensors that talk to the nursing station, and they will become part of a top level “platform” within the hospital. More sensors also mean more data, and providers will create a “back-end platform” to collect, process and route it to the right place at the right time to can create “holistic” value propositions.

With increased regulatory and financial support, we’re on our way to making healthcare what it should be: smarter, cheaper and more effective. Providers want to do whatever it takes to cut costs and improve patient access and experience, so there are no real barriers.

Innovate and prosper!

Blockchain Technology and Insurance

What if there was a technological advancement so powerful that it transforms the very way the insurance industry operates?

What if there was a technology that could fundamentally alter the way that the economics, the governance systems and the business functions operate in insurance and could change the way the entire industry postulates in terms of trade, ownership and trust?

This technology is here, and it’s called the blockchain, best known as the force that drives Bitcoin.

Bitcoin has gotten a pretty bad rap over the years for good reason. From the collapse of Mt. Gox and the loss of millions –  to being the de facto currency for pedophilia peddlers, drug dealers and gun sellers on Silk Road and the darling of the anarcho-capitalist community – Bitcoin is not doing well in the public eye. Its price has also fluctuated wildly, allowing for insane speculation, and, with the majority of Bitcoins being owned by the small group that started promoting it, it ‘s sometimes been compared to a Ponzi scheme.

Vivek Wadhwa writes in the Washington Post that Chinese Bitcoin miners control more than 50% of the currency-creation capacity and are connected to the rest of the Bitcoin ecosystem through the Great Firewall of China, which slows down the entire system because it is the equivalent of a bad hotel Wi-Fi connection. And the control gives the People’s Army a strategic vantage point over a global currency.

Consequently, the Bitcoin brand has been decimated and is thought by too many to be a kind of dodgy currency on the Internet for dodgy people.

The blockchain, a core technology behind what drives Bitcoin, has been slow to enter the Zeitgeist because of this attachment to Bitcoin, the bête noire of the establishment.

But that is changing fast. Blockchain as a tool for disintermediation is simply too powerful to ignore.

People are now beginning to really look at the blockchain as an infrastructure for more than monetary transactions and what it has done for Bitcoin. Just as Bitcoin makes certain financial intermediaries unnecessary, innovations on the blockchain remove the need for gatekeepers from a number of processes, which can really grease the wheels of any business, including insurance companies.

How blockchain works and can work for the insurance industry

Because of the way it distributes consensus, the blockchain routes around many of the challenges that typically arise with distributed forms of organization and issues such as how to cooperate, scale and collectively invest in shared resources and infrastructures.

In the blockchain, all transactions are logged, including information on the date, time and participants, as well as the amount of every single transaction in an immutable record.

Each trust agent in the network owns a full copy of the blockchain, and, in the case of a private consortium blockchain (more relevant to the insurance industry), the transactions are verified using advanced cryptographic algorithms, and the “Genesis Block” sits within the control of the consortium.

The mathematical principles also ensure that these trust agents automatically and continuously agree about the current state of the blockchain and every transaction in it. If anyone attempts to corrupt a transaction, the trust agents will not arrive at a consensus and therefore will refuse to incorporate the transaction in the blockchain.

Imagine there’s a notary present at each transaction. This way, everyone has access to a shared, single source of truth. This is why we can always trust the blockchain.

Imagine a healthcare insurance policy that can only be used to pay for healthcare at certified parties. In this case, whether someone actually follows the rules is no longer verified in the bureaucratic process afterward. You simply program these rules into the blockchain.

Compliance in advance.

Automation through the use of smart contracts also leads to a considerable decrease in bureaucracy, which can save accountants, controllers and insurance organizations in general an incredible amount of time.

While the global bankers are far out of the blocks when it comes to learning, understanding and now embracing blockchain technology, the insurance industry is lagging. Between 2010 and 2015, a mere 13% of innovation investments by insurers were actually in insurance technology companies.

There are some efforts to tap innovation, as the Financial Times in the UK recently wrote. European insurers such as Axa, Aviva and Allianz, along with MassMutual and American Family in the U.S. and Ping An in Asia are setting up specialist venture capital funds dedicated to investing in start-ups that may be relevant for their core businesses.

Aviva recently announced a “digital garage’ in Singapore, a dedicated space where technical specialists, creative designers and commercial teams explore, develop and test new insurance ideas and services that make financial services more tailored and accessible for customers.

And others are sure to follow in the insurance industry, particularly because both the banking industry and capital markets are bullish on investing in innovation for their own sectors – and particularly because they are doing a lot of investment in and around blockchain.

Still, the bankers and capital markets are currently miles ahead of the insurance industry when it comes to investing in blockchain research and startups.

Competitors in the capital markets and banking industries in terms of blockchain solutions include: the Open Ledger Project, backed by Accenture, ANZ Bank, Cisco, CLS, Credits, Deutsche Börse, Digital Asset Holdings, DTCC, Fujitsu Limited, IC3, IBM, Intel, J.P. Morgan, London Stock Exchange Group, Mitsubishi UFJ Financial Group (MUFG), R3, State Street, SWIFT, VMware and Wells Fargo; and the R3 Blockchain Group, whose members include the likes of Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, Goldman Sachs, J.P. Morgan, Royal Bank of Scotland, State Street and UBS.

Then there are start-ups like Ripple and Digital Asset Holdings, led by ex-JPMorgan exec Blythe Masters, who turned down a job as head of Barclays’ investment bank to build her blockchain solution for banking.

There are others in the start-up world moving even faster in the same direction, some actually operating in the market, such as Billoncash in Poland, which is the world’s first blockchain cryptocash backed by fiat currency and which passed through the harsh EU and national regulatory systems with flying colors. Tunisia is replacing its current digital currency eDinar with a blockchain solution via a Swiss startup called Monetas.

There are both threats and opportunities for the bankers… so what about the global insurance industry?

Every insurance company’s core computer system is, at heart, a big, fat centralized transaction ledger, and if the insurance industry does not begin to learn about, evaluate, build with and eventually embrace blockchain technology, the industry will leave itself naked and open to the next Uber, Netflix,  AirBnB or wanna-be unicorn that comes along and disrupts the space completely.

Blockchain more than deserves to be evaluated by insurers as a potential replacement for today’s central database model.

Where should the insurance industry start?

Companies need to start to experiment, like the bankers and stock markets, by not only working with existing blockchain technologies out there but by beginning to experiment within their own organizations. They need to work with blockchain-focused accelerators and incubators like outlierventures.io in the UK or Digital Currency Group in the U.S. and tap into the latest start-ups and technologies. They need to think about running hackathons and start to build developer communities – to start thinking about crowdsourcing innovation rather than trying to do everything in-house.

Apple, Google, Facebook and Twitter have hundreds of thousands of innovators creating products on spec via their massive developer communities. Insurance companies that don’t start lowering their walls might very well find themselves unable to innovate as quickly as emerging companies that embrace more open models in the future and therefore find themselves moot. Kodak meet Instagram.

The first step for insurance companies with blockchain technology will likely be to look at smart contracts, followed by looking for identity validation and building new structural mechanisms where parties no longer need to know or trust each other to participate in exchanges of value.

Blockchain technology, for instance, can also allow for accident or health records to be stored and recorded in a decentralized way, which can open the door for insurance companies to reduce friction in the current systems in which they operate.

Currently, the industry is highly centralized, and the introduction of new blockchain-fueled structures such as mutual insurance and peer-to-peer models based on the blockchain could fundamentally affect the status quo.

As comedian and writer Dominic Frisby once penned, “The revolution will not be televised. It will be cryptographically time stamped on the blockchain.”

Some of the many questions that the industry should explore:

  • What kind of effect will blockchain technology adoption in markets have on the the public’s perception of risk?
  • Today, the insurance industry is centralized, but what could it look like if it were decentralized?
  • How could that affect how insurance companies mutualize?
  • Can the blockchain improve customer relations and confidence?
  • Can smart contracts built on the blockchain automate parts of the process in how business is done in the insurance industry?

If you want to explore further, sign up to express interest here about our coming event in London: Chain Summit Blockchain Event for Insurance.

Connected Humans, Version 3.0

Whether you commute to work on public transport to work or fly between busy airports to serve your clients, wherever you go you will see people glued to their phones, tablets or e-readers. More than likely, all these devices are connected to the Internet in real time over a mobile network or capable of connecting via Wi-Fi.

There is so much written on the connected car and the connected (“smart”) home, but we also need to open a discussion about connected humans.

Let me clarify: I have no interest in talking about social networking. I’m more interested in connections from the perspective of tracking health and biometric data to be used by the healthcare and insurance industries for pricing.

A decade ago, we were limited by the technology and the computing power of hand-held devices. Wearables and ingestible devices were nowhere in the ecosystem. It made perfect sense to use historical data to price and sell products based on stale census information.

Technology drivers

Fast forward to the current time. Computing power has scaled exponentially over the last decade. We have devices that can track, store and filter essential lifestyle and health data, and we have predictive analytic capabilities that would make historic rating methods look like the Stone Age.

Market demographics

The growth rate of Millennials earning paychecks is not keeping pace with the growth in the aging population living off savings. If that was not bad enough , buying behaviors of Millennials indicate that insurance is not one of their top priorities. There are numerous surveys you can find online that point to this problem.

We have heard of “gamification” and customer engagement in the context of banking and financial services, to attract Millennials, but insurance and healthcare companies have barely touched the tip of the iceberg on this. The amount of biometric data that can be harvested and used for predictive analytics could include a host of items, including blood pressure, heart rate, vitamin count, sleep patterns, activity metrics and blood sugar, just to name a few. All this information, harvested and analyzed to price and sell a host of new products to new market segments with lifestyle diseases like diabetes or obesity, opens the route to gamification of healthcare apps and much better life insurance pricing. Providers today stop at just providing discounts on the fringes as I see it, not truly revisiting pricing.

With technology evolving at the pace it is and with our ability to get more out of the data through predictive analysis, the healthcare and insurance segment could look very different 10 years from now.

There is a school of thought that says privacy issues will limit the use of biometric data, but, if there is a business model that works for weight watchers and diabetic forums, there is a business case and a market segment to change the way insurance and healthcare products are priced and sold.

Hertz has begun to pitch itself as a used-car sales channel, allowing the consumer to test drive a car for an extended renting period and then buy or not buy the car. In the insurance or healthcare context, if pricing were driven by behavioral patterns and biometric statistics, you could offer an extended free look or evaluation period allowing a skeptical diabetic or obese customer to try devices, see the effects on their health and the corresponding premium discounts and then make a decision on locking into the product.

Insurance and healthcare have not truly embraced the technology and buying behavioral shift of customers. What remains to be seen is who leads the charge. Will it be insurance and healthcare companies? Will it be technology giants like Google, which are already tracking a lot of what people do? Or will it be a company like Tesla and Uber, which have disrupted traditional industry segments where they were never the incumbent.

What Is the Future for Drones?

In 2013, Amazon CEO Jeff Bezos announced to the world that the online retailer would begin to develop a “drone-to-door” delivery service for its loyal customers. Dubbed Amazon Prime Air, the system would deliver packages directly to your doorstep in just 30 minutes after an order is placed, setting a new and higher bar for “fast delivery.”

However, after a variety of issues and concerns were addressed by increasing regulations added by the Federal Aviation Administration (FAA), it  appeared that Bezos’ announcement would never get off the ground. But after two years of waiting for the FAA, Amazon will finally get to test these drones on U.S. soil — or, should I say U.S. air? — bringing customers one step closer to having their Tide detergent refilled by a delivery drone.

Despite the U.S. government dragging behind on approvals, for retail and civilian use, sales for drones aren’t expected to slow any time soon. Companies like Teal Group, an aerospace research firm, estimates that sales of both military and civilian drones will total more than $89 billion by 2023.

Other big companies, such as State Farm and AIG, are also getting into the drone business. In fact, State Farm is the first insurance company in the U.S. to receive regulatory approval to test drones for commercial use. With drones popping up in so many different industries, it makes me wonder, what impact will drones have on companies’ customer experience — good and bad?

The Good

State Farm plans on changing the insurance industry for the better, using drones to aid in natural disaster relief. For instance, instead of State Farm spending the money (and time) to ship hundreds of claims adjusters out to natural disaster sites to assess damages, the company will send only a handful of agents equipped with a drone partner to more efficiently survey damaged property.

Jason Wolf, a property defense attorney and shareholder at the Florida-based firm, Koch Parafinczuck & Wolf, stated in an interview to ClaimsJournal.com: “I envision a time when, after a catastrophe, an adjuster pulls up to a neighborhood and opens the trunk of his car and presses a few buttons on his tablet device, and the drone does an immediate survey of everything and streams it all right to his tablet device, and he knows exactly where to go first and what’s most significant within minutes. Costing very little money, the insurance company has a sense of everything that needs to be done in a very short amount of time.”

Imagine all the headaches this could mitigate for customers and employees after the chaos caused by unfortunate losses created by natural disasters.

It’s interesting, too, how this type of surveying will require additional training, but training we might be familiar with. Much like a police officer who trains alongside his dog in a K-9 unit, insurance adjusters will train alongside their partner – only, in this industry, it would be a drone.

While there is debate in the insurance world about how drones will operate, one thing is for sure – they will be operated and used to speed up services and save on cost, making customers’ lives a little easier. As such, claims assessment aided by a drone will yield quick turnarounds and an even quicker payout to the insured.

Additionally, insurance companies will start offering drone insurance to owners of unmanned aircraft systems (UAS). RiskandInsurance.com noted that the general types of coverage that will be required for the use of UAS and ancillary business activities will include liability, personal injury, invasion of privacy, property and workers’ compensation. The publication also mentioned that, given the conservative nature of the insurance industry, carriers could place stricter guidelines on drone coverage than the FAA does.

Once regulated and insured, drones will be sent out into the community to collect data. For example, what if someone’s home flooded? Well, insurance companies could send their drone to the flooded house and survey the area for all damages, speeding up the process for families affected.

There is also the use of drones for the collection of data by third parties. Imagine that Ford is looking to target advertisements for a new truck to areas where the road conditions would demand the use of four-wheel drive. Ford hires an agency to send out drones to specific cities where it is looking to advertise.

This drone will collect data on road conditions and take images of cars on the road to make sure a majority of drivers are in trucks, and will then report back on economic conditions. Ford doesn’t want to be advertising where citizens can’t or won’t pay for the product.

In a world becoming more drone-centric, these types of background checks and data collections via UAS will become increasingly more frequent.

The Bad

The government review process for a drone is 120 days, but, by the end of the process, Amazon says the technology of the drone submitted for regulation is outdated. Therefore, Amazon must update its filing and submit to the FAA for regulation, starting the 120-day review process all over again.

The other concern of the FAA is air traffic. Coming down with a few regulations on drone flight, the FAA is requiring that drone controllers have sight of the drone at all times and that they must operate under 400 feet.

Exelis, a global aerospace, defense, information and services company, was featured in an article on Engadget recently, discussing its development of an air traffic control system for drones. Nearly ready for testing at the FAA approved drone-testing sites, the low-altitude monitoring system would keep tabs on compact aircrafts flying at or under the mandated 400 feet.

It’ll be interesting to see how industry giants, such as Amazon, overcome these obstacles to create a non-invasive customer experience with drone technology.

Once regulated, the next issue is invasion of civilian privacy. Private and civil liberties advocates have raised doubts about the legitimacy of facial recognition cameras, thermal imaging cameras, open Wi-Fi sniffers, license plate scanners and other sensors commonly used by drones in the civilian sphere.

Civilian uses of drones for hobby are already causing issues, most notably at the White House, but across the country, as well. The LA Times reported last June that while LA Kings hockey fans were celebrating their Stanley Cup victory, a group noticed a drone flying over their heads filming the scene. Angry at the invasion of privacy, the crowd knocked the drone out of the sky using a T-shirt and then smashed it to bits with a skateboard.

In Los Angeles, flying a drone in public is not illegal, but LAPD Cmdr. Andrew Smith commented that, “It was kind of an eye-opener for us, that this something we really need to pay attention to.” While the Kings fans reactions may seem a little over the top, the general population seems to feel the same way when they see a drone overhead.

With no official laws on the books regarding the use of domestic drones, the right to privacy becomes a large topic of concern for many citizens. The American Civil Liberties Union states on its website, “Congress has ordered the Federal Aviation Administration to change airspace rules to make it much easier for police nationwide to use domestic drones, but the law does not include badly needed privacy protections.”

It will be interesting to see how industries promote drone use to their customers, without raising fears about a threat to privacy. After all, customers may not always be right, but they are always the customers.

Drones will also need to be protected from cyber attacks.

“Cyberattacks on your PC – they can steal information, and they can steal money, but they don’t cause physical damage, whereas cyber-attacks in a UAV or a car can cause physical damage, and we really don’t want to open that can of worms,” said Kathleen Fisher, the previous program manager of the DARPA project in a statement to NextGov.com

The Pentagon is currently working on developing code that will protect a Boeing Little Bird unmanned aircraft from being hacked. Defense industry programmers are rewriting software to safeguard the computer onboard the helicopter drone and aim to have the project completed by 2017.

The Future

It’s exciting to think about what drone technology will bring to companies and their customers – and to people everywhere. Let’s face it, if we think we have seen the complete potential of what customer experience has to offer, then, well, we’re being naive. The new drone technology will reinvent customer experience once again. And the best part? We all get to see how it unfolds.

The future seems endless for drones. Whether you feel they are an invasion of privacy, or they will begin to make our lives easier and aid society in ways that haven’t even been thought of yet, drones aren’t going anywhere any time soon. If you need to put it in perspective, a white paper featured on Cognizant.com notes that 40,000 drones are expected to deploy in 2015, and this is a number that will continue to increase each year. This industry is ready for take-off.

drone 2

If you haven’t come face-to-face with a drone yet, don’t worry, you will.

Insurance and the Internet of Things

Depending on the day of the week, one of three buzz words seems to fill every column inch, to be used in the marketing of every new product or service and to be cited in every press release. To me, these are, digital (insert anything here), big data and the Internet of Things (IoT). It’s no surprise that the IoT is at the peak of Inflated Expectations in Gartner’s Hype Cycle.

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In this post, I want to explore IoT a little further, specifically with the insurance world in mind.

Like any self-respecting early adopter (technology geek/gadget magpie), I personally see the IoT as a game-changing disruptor, regardless of industry. My kids won’t know a world without almost every conceivable thing being connected to the Internet. Depending on which report you read, there will be anything from 100 to 500 sensors in every home and a market for the IoT worth $7.1 trillion by 2020 (IDC), with more than 4.9 billion connected things by 2015 (Gartner). Very few of the technology giants are not investing heavily in this secto. The IoT is not a fad.

So what is the IoT?

It’s simply the ability to interact with a network of physical objects that feature an IP address (directly or indirectly) and can connect device to device or device to human. Today, you can connect lots of things to the Internet, some of which you would never expect. Examples include:

  • Homes and commercial buildings — Smart buildings with smart sensors and smart utilities, security systems, environment monitoring, smart carpet, etc.
  • Automobiles — tracking when, how and where you drive. Transport vehicles of any kind, including driverless cars, could be connected, as could individual items/packages on a cargo ship.
  • Livestock — WiFi sheep; see here from the BBC on why sheep are being fitted with WiFi sensors,
  • Human beings — the latest in wearables allows companies such as Vitality Health Insurance to reward healthy behavior, reducing your premium for the more active and healthy you are.
  • Smart cities — where everything is truly connected. Libelium has 50 great examples here. Have you walked down Regent Street in London recently? It’s an interesting experience. We live in a truly context-aware world.

As Ben Evans said in his great piece, “Mobile is Eating the World,” “Sensors profoundly change what a computer can know.”

Perhaps an easier question to ask is: What can you not connect to the Internet these days? This is a rapidly diminishing list. Look back 12 months or so to the Top 25 weird things to connect to the Internet; all of a sudden they don’t seem so weird. What will happen in the next 12 months? For fans of contactless payment cards, how do you feel when you can’t use it, as a retailer hasn’t yet adopted the technology? Inconvenienced? These are the sorts of simple things that give me time back and are simple and convenient.

Ultimately, it’s all about automated data collection from the source itself. As insurers, our success depends on this. It’s what drives our very industry, right from the very first research, through to quote, bind and every event thereafter that drives our risk, pricing and actuarial teams. Getting this data and monitoring this directly from its source has huge potential in today’s traditional insurance business model.

Another example of positive uses is from Uber, whose data is now supporting city planners with urban transport. As insurers, we could use the same data to avoid accident black spots, congestion and much more. Traffic systems would be linked directly to the flow, density, type and vehicles themselves. Basic data such as time of day, postal code or gender is simply not enough anymore. IoT connected services can change everything.

Opportunities


The cost of connecting things today has becoming almost insignificant, and, importantly, the desire for things that are not connected is diminishing at a greater pace. Ten years ago, you would test drive a car and, nine times out of 10, focus on the driving experience. The first thing people do today is check the “infotainment,” how your smart phone can connect, what you can control via an app. It’s not just cars; I recently moved house and, when looking at new house alarms, a key consideration was what can I control and monitor via my phone or an app. Manufacturers are quick to jump on the bandwagon. Have a look at ADT Pulse (unfortunately not yet available in the UK, but many others are).

It seems there are lots of options, but they are still working on old-fashioned business models. When will alarm monitoring be undertaken by your crowd sourced/handpicked local community as opposed to the centralized service center, which then calls the police? With IoT, who needs middlemen? The first notice of loss (FNOL) or claim process becomes automated (we have talked about this for years). The level of fraud can be dramatically reduced. Everything you can interact with or monitor, you can now predict better than ever.

How does the IoT affect the carrier, agent or broker? Have a look at the infographic below — which of these “things” did you expect to monitor? (The site for the infographic is here.) As the local city administration, can you reduce accidents or claims from understanding smart roads, pothole damage and more? Reduce health costs by understanding pollution?

libelium_smart_world_infographic_950px

We as insurers typically struggle because customers rarely want to speak to their insurers. In the new economy, we have the opportunity to be connected all the time to each other. This brings a vast number of possibilities and new potential business models to us, based on this new wealth of data.

Insurers now have the ability to know in advance of an event, ultimately improving their customers’ and potential customers’ experience, security and well-being.

With everything connected, what could go wrong?

However, the IoT has to come with a health warning, too. For me, three of the key things to consider here as insurance organization are:

  1. You are now really competing on data, nothing more. We never produced any products, anyway; now it’s even more transparent. Make sure you know your data, can process it efficiently and effectively, understand it and most importantly use it. How we use information to enrich our world will be key. Don’t drown; the volume is about to explode. As an example, every minute, OCTO stores more than 118.000 data points from drivers around the world. How will you stand out from the crowd? I wrote recently here on how brand will be critical. Ownership of the data will also be key. BMW recently announced that it would not share any of its connected car data. It does, however, have a significant partnership with a large global insurer already.
  2. Another key risk is from cyber security. There are already stories of usage-based insurance (UBI) car devices potentially being hacked. What happens if your driverless car gets hacked and then crashes, causing serious damage or, worse, a fatality? Who will carry the risk?
  3. You must see how the IoT can drive new business models, based on customer demand. Ray Wang recently said that we are now supporting mass personalization for a market segment of one. What can you now insure that you never could previously for individuals and organizations? New business models don’t mean we have to go alone, either. New partnerships will drive innovation and, importantly, convenience for the end user. Be careful not to miss out on the output, as British Gas has with Hive and nPower has with Nest. Ignore the Hive and Nest connected devices; the data they collect is what matters.

For once, the insurance industry could be as quick to adopt as everyone else to adopt, or ahead. We are on the forefront of data enrichment and much more. We can better price, engage and interact with our customers and prospects. We can interact with each and every stage of the insurance life cycle; we can join and automate the dots faster and better than ever before.

It’s an exciting time, and while it may be a while before the legacy oil tanker turns, we had better be ready and at the wheel if we are to own the opportunity.