The connectivity of objects, known as the Internet of Things, is described in a new report from AIG as the start of a revolution—industrial and technological.
But with the massive opportunities of IoT, it also “will present significant challenges across all sectors and for all industries,” said AIG.
“As it solves problems that have plagued businesses for decades, if not centuries, it will also create entirely new dilemmas, both procedural and ethical.”
Shawn DuBravac, chief economist at the Consumer Electronics Association, said in a foreword to the paper (the first in a series): “It is safe to that we are at the start of another industrial revolution,” with IoT rivaling past technology innovations.
With the declining cost of sensors, more objects are able to have them, capture data and transmit it over the internet. Because of this, more data is being produced than ever before. According to some estimates, there will be 40 to 50 billion connected devices by 2020.
In a second foreword by Carlo Ratti, director of the MIT SENSEable City Lab, said there is a data-driven “technological revolution looming.” IoT has the capability to “do away with many inefficiencies, hassles, dangers, and unsafe practices of modern life,” he said.
DuBravac and Ratti each said the insurance industry can plat a major role, especially since it no stranger to using data to mitigate risk. DuBravac went so far as to say the industry could be the leaders to analyzing the data gained from IoT devices and “extract meaningful and actionable insights—insights that could make our world a safer and more productive place than we could ever have imagined.”
However, as AIG contributed: “Concerns over privacy, cybersecurity, and property and products liability will quickly become just as robust as the opportunities IoT presents.”
In subsequent installments of the series of the papers from the insurer, it promises to go deeper into the risks and provide mitigation tips to businesses.
Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
