After a somewhat slow start, insurers are doing a pretty good job of leveraging mobile technology. Bring-your-own-device adoption is high, and innovative apps of all kinds for policyholders and for agents are sprinkled liberally across the industry.
But now, the definition of mobility is broadening to include a large amount of location-aware, data-transmitting devices. Along with this expansion is the potential for insurance innovation. Think about how telematics has changed over the past year, from a black-box model to using capabilities in cars coming off the line daily.
InformationWeek is doing some excellent reporting on the "Internet of Things," the concept that more objects are going to be connected to networks and interact with each other. The latest report comes from the UK, where a London-based startup, Evrything, is working on an interoperable standard between all these devices.
The company is "building an open standard for 'things' to interact seamlessly with each other on the Web. If [founder Andy Hobsbawm] and his team can pull it off, that would allow the product manufacturers to focus on the novel types of applications and services they can offer on top of Web-connected products, without worrying how their products get connected in the first place," according to the article.
In an infographic that's part of the article, the following items appear as part of the Internet of Things: appliances, medication, a bicycle, a guitar, even a bottle of wine. For insurers, this opens up a wealth of options: smart pill bottles could alert pharmaceutical payers that it's time to send a refill, for example.
Perhaps some of this seems overly futuristic. But this revolution in connectivity is coming, and insurers have likely learned their lesson from mobility: You don't have to wait for this stuff to come to you, you can go grab it and take advantage before you're playing catch-up. There will be security, privacy, and regulatory issues to work out before new insurance products can truly leverage these devices, of course.
But a little innovation now can go a long way toward being ready to meet these challenges. Consider the example of Progressive, which stuck its neck out on usage-based insurance years ago. Now, the black-box model the carrier experimented with seems to have been supplanted by new options. But the company's expertise in data management and pricing using driving data has give it a wide lead in the burgeoning UBI market. The question is, which company will be the first to get expertise in some other kind of connectivity?