5 Insurance Impacts of the Internet of Things

Smart devices are poised to alter policyholders' lives — and the way they are insured.
February 01, 2013

Anthony O'Donnell also contributed to this article.

When I&T sister site InformationWeek went to this year's Consumer Electronics Show, a major theme was the "internet of things" — a big jump in the number of networked devices.

Intel's CTO talked about wearable technology, while Cisco's CTO of emerging technologies noted that "the marginal incremental cost to adding connecting or computing power is getting smaller and smaller."

While some remain skeptical about if this massive increase in connectivity truly serves the public, insurance industry observers see it as an opportunity to get a clearer picture of risk.

"Everything in the world is becoming instrumented and connected," says SMA partner Mark Breading. "The potential to gather real-time data from these trillions of points around the world and make them useful to the insurance industry is huge."

Following are several examples of the kind of connected devices that insurers might explore down the road:

1. Appliances

You may know Samsung as Apple's mobile phone nemesis, but this year it moved more into competition with companies like GE with its T9000 refrigerator. Though the limitations of the product were snarkily noted, a "killer app" for a smart fridge could include health insurance discounts for storing healthy food at home or business insurance breaks for knowing early on if it was about to fail and spoil its contents.

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Milad Mosapoor [Attribution], via Wikimedia Commons

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