Critical Analysis of a White Paper: Internet of Things; Opportunity for Insurers
This papers covers the growing phenomenon that is Internet of Things (IoT) and provides a perspective of what impacts IoT will have on the lives of consumers and specifically as relates to insurance. It proceeds to recommend tactical and strategic actions that insurers can take to benefit from this shift while at the same time giving pointers on quick wins that can be developed to attain an edge in the changing world.
The reader is made aware of the changes that IoT will bring into the daily life of the average consumer and how this will impact property and casualty (P&C) insurers. The fact that IoT brings with it a whole plethora of relevant and real-time information that unlocks possibilities of interacting with their direct environments as described by Manyika et al. (2015) means that P&C insurers have a challenge in engaging with consumers as regards “just-in-time” events. The reader’s attention is brought to the benefits of IoT to the P&C industry; the various value propositions for additional revenue, improved economics in business models and change of operating boundaries. The authors, however, do not discuss how these affect the general perception of information security and risk; its possibility of being a new avenue for revenue in line with property insurance. This can be highlighted as a quick win by the authors since it is a rapidly growing risk area in big data which is essentially what IoT will produce and be part of as highlighted by Crawford and Plesse (2014) and their assertion that insurers do indeed face key issues in security, integrity and risk of consumer data.
The ideas are presented in a fluid and contextual manner that is sufficient to educate and enlighten the reader on the possibilities presented by IoT, to not only the P&C insurance industry but to general industry as highlighted by the various test models that show that IoT is indeed here to stay (Silva & Malo, 2014).
The use of diagrams to highlight the situation in the P&C industry makes it simple even for those new to the topic to relate the key issues and the trends. Use of acronyms without their breakdown makes it difficult for the reader to fluidly go through the paper without having to constantly refer and check for meaning of abbreviations.
In conclusion, the paper is an eye opener for those in the insurance field on the enormous potential of IoT in building their business despite the looming challenges. It forms a very good guide for insurers seeking to make the most of the IoT revolution.
References;
Manyika, J. Chui, M., Bisson, P., Woetzel, J.,Dobbs, R., Bughin, J., & Aharon, D. (2015) The Internet of Things: Mapping the Value Beyond the Hype. McKinsey&Company, viewed 15 June 2016 https://www.mckinsey.de/sites/mck_files/files/unlocking_the_potential_of_the_internet_of_things_full_report.pdf
Reifel, J., Pei, A., Hales, M., Blanter, A., Lala, S., Bhardwaj, N. (2014) Internet of Things: Opportunity for Insurers. AtKearney, viewed 14 June 2016, https://www.atkearney.com/documents/10192/5320720/Internet+of+Things+-+Opportunity+for+Insurers.pdf/4654e400-958a-40d5-bb65-1cc7ae64bc72
Crawford, S. & Plesse, D. (2014) Cyber insurance, security and data integrity, Ernest and Young, viewed 15 June 2016 http://www.ey.com/Publication/vwLUAssets/EY_-_Insights_into_cyber_security_and_risk/$FILE/ey-cyber-insurance-thought-leadership.pdfhttps://www.atkearney.com/documents/10192/5320720/Internet+of+Things+-+Opportunity+for+Insurers.pdf/4654e400-958a-40d5-bb65-1cc7ae64bc72
Silva, E. M., Malo, P., (2014) IoT Testbed Business Model, Scientific Research Publishing Inc, Caparica, pg44
