How will the Internet of Things change insurance as we know it

Tendency is for home appliances to be connected to the Internet – TVs, fridges or even light bulbs. According to the Business Insider by 2018 there will be 9 billion IoT (internet of things) devices connected. The diagnostic and sharing capabilities of these items will surely have consequences for the insurance sector. Catching up with this technology will certainly have consequences on insurance policies and claims practices. IoT devices will both be constantly connected to your smart devices and run software which personalizes them to your behavior.

The big idea here is “connected coverage” – people performing risk management with the assistance of IoT. Lets examine some real-life connected coverage issues.


One plausible scenario is your doctor telling you to mind what you eat due to high cholesterol. There are quite a few apps that can track your fitness program or diet. This information about your sports activity and food consumption can assure your insurance provider that you are not exposing yourself at unnecessary risks.

In the car

Issue is that you have one speeding ticket or scratched someone else’s car by accident. How do you prove you are a good driver ? One possible solution is software like Progressive Snapshot which can record your driving habits and share real-time information with the insurance company. The insurance provider can now monitor drivers and notify you if driving recklessly.

At home

Instead of performing damage control on big-ticket items in your home, companies like Nest or Notion are developing sensor and Wi-Fi devices which detect motion, sound, temperature, humidity and water presence so you can avoid poor conditions and costly claims. Such technologies will definitely bring home maintenance to a whole new level.

Social media has revolutionized consumer behavior. People have the ability to communicate with their favorite brands, which with IoT implementation will again reach one whole new level. The two-way communication will be accessible to insurers. According to recent research done by Accenture, 78 percent of insurance customers will not mind sharing personal data in exchange for benefits e.g. lower premiums or faster settlements.

IoT data can be used to calculate hazard in much more detail, basing those calculations on daily routines. It will result in more evidence for claims and more communication between the two parties.

All the data transmitted by smart devices will give insurers ways to identify trends and patterns of one’s behavior. Very often we look back in history to make choices for the future. New information can be referenced with already stored data to make forecasts and propose preventive actions. Stemming from this in the near future insurance will very likely switch from a model built around reactive claims towards one focused on prevention. Smart devices will be able to reduce both risk and claims losses.

In a nutshell, IoT will provide much more customization. For comparison, the old model was one where level of risk was averaged and now it can be customized. This personalization, matching personal demands, will surely save you money in the long run.


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Is job automation the next big threat to our global economy?

In their paper “The future of employment: how susceptible are jobs to computerization?”Carl Benedikt Frey and Michael Osborne research 702 occupations in the US labour market concluding that 47% of the whole workforce is at risk of computerization in a time span of around 10 years from now. Out of those 702 jobs, around a 100 have 95% or higher risk of automation much earlier.

Technological development, however, is not the only factor affecting that probability. Governmental regulations, cost and availability of skilled workers and social factors still have an important role. Still, technological advancement does not wait for society to catch up with it – everyday it is providing cheaper, faster and more efficient solutions in terms of hardware, software or combination of the two. See Moore’s Law. In our current economy where costs of equipment, labor, estate etc. define competition, automation which greatly reduces those costs will surely be in demand. Uber researching autonomous vehicles will remove drivers’ jobs, a sector numbering around 135 million professionals in the US and many more in the rest of the developed world. When implemented, computerization will quickly affect retail cashiers, fast food workers and clerks and this is only the tip of the iceberg.

Optimistic economists state that in the past whenever a technological revolution occurred, obsolete workers revised their skills and took on jobs that did not exist. This conveniently leaves out the fact that the jobs created by that revolution were far less than the ones technology replaced. Technologists say that breakthroughs have consistently enhanced living standards, health and therefore life expectancy. Still new technologies are always expensive in the beginning so for them to be significantly effective they have to be affordable for everyone.Today technological advancements play a role in every aspect of the economy. What would the millions unemployed do if their jobs become obsolete? They either get lower paid positions or become unemployed. Either way purchasing power will fall down much faster than the falling price of goods and services. Without adequate measures this may result in another global crisis. In developing countries this fluctuation is smoother as increase in living standards and workers’ growing salary demands sync – for example China.

In his essay “Why is software eating the world?”, Mark Andreessen focuses on how in a few years time every company will be software company – there won’t be any uncomputerized businesses. But in his pragmatic vision that “eating” is actually survival of the fittest within the software industry with examples of Google and Amazon acquiring numerous other companies, he leaves out this main point – software is already devouring the social and economic pillars of our world. Automation is threatening to disrupt the money flow from consumers to producers. We have to open-mindedly embrace the future keeping this issue into account.

The easiest solution might be to just decrease the correlation between work and spending power with more governmental interference. Dr. Martin Luther King’s idea of basic income is a solid fit for this situation, although to some people it might be in contrast with the Western world’s Protestant work ethic. In what other ways could a society protect those whose labour has become obsolete due to automation and are not able to re-employ elsewhere?

Whatever the outcome one thing is certain – jobs will never be the same after the revolution occurs. One optimistic view might suggest that it will lead to utopian world where all human beings are not engaged in dull, repetitive tasks. We can also be sure that the economically strong today will cling to the old system as long as they can. We just have to be very cautious in every step of the way.


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Openness and privacy online – two sides of the same coin

There have been many discussions about the topics of privacy and openness in the cyberspace and both are regarded as completely separate. A new perspective focuses on the notion that these issues are interconnected and of equal importance.

The proponents of openness focus on benefits such as technological development, cost savings and citizen participation. And it is not only in theory, as this idea is implemented in some parts of the world. A real-life example is the one with the National Oceanic and Atmospheric Association in the US which in the 1980s decided to make its data public. Today we have a billion-dollar weather industry including apps, forecasts and websites.

It is not, however, always positive and straightforward as one might hope. Personal information protection is still important, since free access to it could easily lead to untraceable abuses. According to the CEO of Privacy International, privacy is “the governing framework to control access to, collection and usage of information.” The strongest argument for privacy control is, in fact, protection of personal data.

People’s motivation behind both privacy and openness stems from the same idea of being in control of your choices.

Another important aspect of the privacy-openness issue consists of the transparency related to power issue. In more simple terms the more power you have, the higher accountability you should have in front of society. However, hardships arise when defining power, as it can be political, social or monetary. So far, we have only one field partly covered – the political power and more precisely the PEP (Politically Exposed Persons) databases. People who are in any way in close relationship with politicians – kin or business. There should not be separation between data protection and openness regulations but rather one framework controlling yet encouraging open information.

A few examples from the real world further complicate the issue. For example in Sweden there is free access to tax records, while in Germany such data output is off limits and has many opponents. But at the end of the day you want data protection for the same reason you want openness – you want to know whatever the government has on you is true and confirmable. Open data conversations need privacy groups which will act as counter-weight.

This approach should not clarify all uncertainties but it should give a push to one somewhat frozen issue. Maybe using this point of view as a starting ground could lead both sides towards working for one common goal.


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Google Photos is going to be free but there is a catch


Google announced a major decision for its cloud-based photo storage and sharing service called Google Photos. The company decided to segregate it from its social network Google+ and release it as a separate app.

This new program is expected to have unlimited storage promising to cover all your photos and the best part of it – it will be completely free, unless you are a pro who wants to upload the most high resolution content. Photos will be processed through a lossless algorithm and stored on Google’s endless cloud storage space.

When it comes to marketing this not-so-new product the company is doing great, stating that these are not just pixels in certain order but “treasured memories”. However, it conveniently leaves out that anything you snap with your camera will be accessed by Google – e.g. documents, receipts, price tags, places you visit or things you want to buy. If you run out of storage on your phone, the Google Photos will automatically delete pictures already saved on the cloud service, freeing space for more input. Is this the future of advertising or a bold breach of privacy?

At the end of the day it is all about data – Google has developed advanced algorithms which can use natural language queries to sort different categories of pictures. But this is not where it ends – the software developed by the company is so complex that it can recognize landmarks even when your geolocation is turned off.

In 2004 Google introduced the Gmail service. It quickly attracted huge user base with its incomparably high storage capacity. Today the company is doing the same but with photos.

With growing privacy concerns worldwide, Google has once again proven that it is on top of events. The company has started a “privacy dashboard” seeking to limit its data-gathering actions. What makes people uneasy is that Google is stating its entirely for the user’s benefit. At the same time the core business of the company is its users’ private data and it will make anything to get continuous access to it. Another disappointing fact is that in 2012 Google unified the privacy policies of 60 of its products which is in direct contrast with what the company is trying to convey.

The truth is that since the service is free of charge the value has to come from somewhere else. All we can hope is that new users will be well informed before using a program like Google Photos. Whether it will be successful or not we just have to wait a bit.


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Is the automotive industry handing its keys to Silicon Valley?


Which is the next field where Google and Apple will clash? It is estimated that by 2020 one in every 3 cars will be connected.With only few exceptions, car manufacturers have already settled on either Google or Apple for their dashboard software.

An interesting story with reference to today’s situation is something that happened to IBM – a world leader in producing computers who lost big because it lacked user-friendly graphical interface. For only five years between 1985 and 1990 users’ demand shifted drastically – people were not interested in the hardware of their machines(a core competitive advantage of IBM) as long as they were running on Windows which became an industry standard. IBM lost because it had given the user interface to Microsoft  even though the latter never created computers.

One logical question arises – is the automotive industry doing the same mistake IBM did 30 years ago? There are two polar groups of stakeholders we would like to mention. The first includes the people who love the internal combustion engine and will resist new technologies, avoiding driving smartphones on wheels. The other group are the early adopters – the ones that set trends for other users. Many of those people will be instantly in love with whatever Google or Apple create – whether it is a dashboard or a self-driving vehicle.

Either way it is up to the car manufacturers to identify and develop other ways of adding value to their products if they want to stay in business as the Silicon Valley giants are closing in.


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Android Wear Update

Google has just updated its Android Wear with the some pleasant and useful features. This includes Wi-Fi support that gives you more freedom to roam around and always-on screen view (no tapping, twisting or shaking required to see what time it is).

If you get into artistic mood, a watch can recognize the on-screen drawings and turn them into emoji icons. And if you happen to forget your phone, you can always ask your watch where it is.

More information on Google Official Blog.

[Image Credit: Google Official Blog]

We Need To Get The Internet Of Things Right

Here is a good article from Dave Evans giving us some food for thought of how important it is to get things right with the Internet of Things (IoT). Now.

“Having grandiose visions for IoT is one thing, but IoT really does have the power to transform even mundane things into something remarkable … We must get to the point where technology works for people, rather than people working for technology. IoT is here, but our work is just beginning.”


NailO – a thumbnail track pad from MIT

Fresh from the MIT campus – a new wearable device that turns the user’s thumbnail into a miniature wireless track pad.

Inspired by the colorful nail stickers, the invention can be solution in moments when hands are full. For example, when cooking you might need to answer the phone or scroll through a recipe.

The researches will present their concept next week at the Association for Computing Machinery’s Computer-Human Interaction conference in Seoul.  Read more on MIT website.