the internet of things (iot) – reinventing insurance · image source: getty images/istockphoto...
TRANSCRIPT
The Internet of Things (IoT) –
Reinventing InsuranceMarc Saulsbury
Hartford Steam Boiler / Munich Re
The Internet of Things (IoT) –Reinventing Insurance
March 2, 2017
Image Source: Getty Images/iStockphoto
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 1 of 17
`
Image Source: Hartford Steam Boiler (HSB)
“The insurance companies that win in the next century will be those that insure least, in that they pay the fewest claims and they’re the most preventive”
– Andreesen Horowitza16z Podcast:Reinventing Insurance January 31, 2016
© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 3
IoT (Internet of Things)IoE (Internet of Everything)IIoT (Industrial Internet of Things)Industry 4.0Image Source: Getty Images/iStockphoto, Getty Images, Shutterstock
Smart, Connected Everything4© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 2 of 17
What is
IoT?
5© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Cheap Hardware
UbiquitousConnectivity
Cheap analyticsin the cloud
6© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.Image Source: Shutterstock
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 3 of 17
Technology is
getting smarter
7© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
“Memristors” could bring a new wave of micro technology and connected devices at the
atomic level
Image Source: Getty Images/iStockphoto
8© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
The future isalready hereSensors can operate more quickly and on multiple levels. Equipment and devices can be monitored and controlled with far greater efficiency and with a capacity to interconnect devices at multiple locations and of many different types.
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 4 of 17
2016:
6.5 Billion devices
2020:
50 Billion devices
Image Source: Getty Images/iStockphoto
Internet of Things
9,000 exabytesSource: “IDC’s Worldwide Internet of Things Taxonomy, 2015,” IDC, May 2015;
“Worldwide Internet of Things Forecast, 2015 – 2020,” IDC, May 2015.
9© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
A tsunami of dataInformation being transmitted from sensors to devices at a ferocious pace
10© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Inter-connected devices will increasingly be at the heart of equipment, systems and operations in business, industry and homes around the world.
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 5 of 17
Financial impact of the
IoT technology revolution
11© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
$3.9–$11.1 Trillion annually
Image Source: Getty Images/iStockphoto
12© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
All Industries are affected
Image Sources: Getty Images/iStockphoto, GettyImages, Shutterstock
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 6 of 17
Big industrial players
13© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Big technology platform players
…
…
The IoT Opportunity for insurance
* Includes 2014 worldwide commercial premiums of US$728.6B [$210.3B (28.9%) commercial motor] – Finaccord, Dec 2015. 1 Represents a drop in the premium basis, mostly across primary perils in the next ten year. ”Can a Fixed Cost Property/Casualty Industry Survive the Internet of Things?”, Celent, March 2016.2 As a comparison, the auto insurance market is projected to decline by as much as 40% due to the expected emergence of autonomous vehicles according to a KPMG study
Total Insurance Industry Premiums*
(incl. >$700B USD Commercial*)
Total Insurance IndustryPremiums
(Primary Perils)
20262016
New IoT-enabled Services
New IoT-based Financial Products
15%1
40%2
to
14© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 7 of 17
Well publicized IoT applications
15© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Auto
Home
Workers’Comp
Health/Life
60%of insurance companies
have piloted orconsidered pilots of IoT
15%of insurance
companies have launched IoT- based
solutions
Source: UBI Global Study 2016, Ptolemus
Powered by the Internet of Things,Insurance will evolve fromproduct-centric to service-centric
New TechnologyIs Disrupting InsuranceRapid advances in technology are disrupting the insurance industry with a shift towards near-perfect information that unpacks risk
16© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.Image Source: Getty Images/iStockphoto
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 8 of 17
Powered by the Internet of Things,Insurance will evolve fromproduct-centric to service-centric
There Will Be A Shift Toward Value-added ServicesWith near-perfect information, the need to insure traditional risk decreases and our core value proposition will need to adapt
17© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.Image Source: Getty Images
1 Gartner
Powered by the Internet of Things,Insurance will evolve fromproduct-centric to service-centric
Insurance Will Evolve Into a Service-first SolutionWe will address the future “business moments”1 of our partners, client companies, brokers, and facility owners with service-first offerings that define the nascent IoT landscape – coupled with insight, products, etc.
18© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.Image Source: Getty Images/iStockphoto
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 9 of 17
19© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
IoT will change industry and
disrupt insurance
IoT is not primarily about
risk reduction(efficiency, security, marketing & risk)
IoT extends business
models beyond insurance
IoT customers are
different(insurers, end customers, equipment manufacturers, etc.)
IoT marketing and products are different
IoT creates new insurance / financial product opportunities
Glimpse of the IoT Landscape
20© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 10 of 17
Orchestratingan IoT ecosystemof partners andtechnology
21© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Vendors
Insuranceentrenched
in the innovationecosystem
Investments
Partnerships
Acquisitions
Hardware (Gateways)Software (Data, Interface)Services (Integration)
“Meshify is a complete cloud-based Internet of Things (IoT) platform that develops electronic device management software; offers cross-platform measurement, monitoring, and control; and provides real-time monitoring and alerts of potential risks and information that improves business operations. Meshify offers software, hardware, and services that simplify the collection of data; manages complex monitoring; and displays sensor data in user-friendly web and mobile applications.”
22© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Sensors M1 Fly M1 Spider
Web
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 11 of 17
20 software engineers and engineers dedicated
to IoT research, experimentation and deployment
23© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Convenience Store Grocery Store Schools Churches Dry Cleaners Apartment & Condos Medical Offices Restaurant Office Buildings Hotels Machine Shop
>9,000sensorsdeployed
>2,700locations
11occupancies installed
>220technology companiesevaluated
45technologysolutionstested
>45alerting algorithms from developmental to production stage
IoT is
HARDUse case selection? Location selection?
Sensor package selection?
Partners and technologies?
Customer enlistment?
Inventory management? Program management (contact updates)?
Installation options?
Communications technologies?
Hardware support and maintenance?
Software and middleware?
Real-time monitoring?
Alert and notification design?
Front-end apps and UI?
Data export and distribution?
Data analytics?
Machine learning? Predictive maintenance?
Service provider network?
Financial guarantee?
Problems to
Solve
24© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Data encryption (in transit and at rest)?
Core data storage and architecture?
Real world physics problems of time, space, connectivity
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 12 of 17
Connected Home
25© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Perishable Goods
26© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.Image Source: Getty Images
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 13 of 17
27© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Medical Office
Image Source: plainpicture/Westend61/Florian Küttler
28© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Schools
Image Source: Getty Images
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 14 of 17
Sensor Array – Example
29© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Ambient humidity sensor
Water sensor
Typical School
Equipment monitoring
Temperature sensor
Water sensor
Vibration sensor
Temperature sensorTemperature sensor
Temperature sensor
Electrical equipment monitoring
Temperature sensor
30© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.
Air Quality
Image Source: Getty Images
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 15 of 17
Business Interruption
31© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.Image Source: Getty Images/iStockphoto
and many more
32© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved.Image Source: Getty Images/iStockphoto
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 16 of 17
With near-perfect information, the need to insure traditional risk decreases and our
core value proposition will need to adapt
Image Source: Getty Images/iStockphoto
From insurance to ASSURANCE
© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 33
The Internet of Things (IoT) –
Reinventing InsuranceMarc Saulsbury
Hartford Steam Boiler / Munich Re
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 17 of 17