Internet of Things (IoT): Considerations for Life Insurers
Internet of Things (IoT) is a cross-industry, worldwide trend led by connectivity to Internet and development of programmable devices and sensors. Smartphones, fitness trackers, smartwatches, car black boxes, smart home sensors, and smart clothes—these ar
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Internet of Things (IoT): Considerations for Life Insurers Aleksandra Małek
12.1
Introduction
Like many other industries, the insurance industry has been affected by the Internet of things (IoT). This is a worldwide trend that consumers and enterprises stay connected1 and are present online more often than at any time in the past. This connectivity is enabled by smartphones, laptops, tablets, e-readers, or computers. It is also enabled by other items like dedicated work/route tracking devices, car built-in dongles, home appliances, smart TVs, personal hygiene items, toys, smart clothing items, shoes, and many others. At the same time, patients worldwide are using medical devices connected to their mobiles. Smartwatches and wristbands are replacing traditional watches, allowing their users to track activities, number of steps, or heart rate. The aim of this paper is to provide an overview of IoT in insurance and address current issues, opportunities, and challenges in the life and health insurance area, focusing on applications of wearables, health mobile apps, and medical devices. Due to editorial restrictions, the author will focus primarily on IoT-linked life insurance products and IoT applications at various stages of a typical life insurance value chain. Limited attention will be paid to technical aspects (connectivity types, IoT platform types) as well as data protection and security topics. Those aspects are still relevant but can easily be addressed as part of any cross-industry IoT considerations, without focusing on insurance.
1 Connectivity is ensured by radio or Ethernet protocol. Radio protocols include ZigBee, Zwave, Bluetooth, Wi-Fi, cellular technology, or LPWA (low power, wide-area), and each of them has different characteristics. More information on technical aspects of IoT protocols can be found in (Sinclair 2017, pp. 195–199).
A. Małek (*) Independent Researcher, Warsaw, Poland © Springer Nature Switzerland AG 2020 M. Borda et al. (eds.), Life Insurance in Europe, Financial and Monetary Policy Studies 50, https://doi.org/10.1007/978-3-030-49655-5_12
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A. Małek
References to this article are mainly press releases, reports published by reinsurers and consulting companies, or information obtained directly from life and health insurers. To anticipate potential concerns of reviewers or future readers, it is important to make it clear that the academic literature available is very limited.2 This is a remarkable misalignment between the academia and the market because, at the same time, most of the leading consulting companies and reinsurers agree that the IoT is one of the top trends for insurers.3 The author has conducted comprehensive analysis of those reports and papers published throughout years 2017–2019. Reports prepared by consulting companies are not an academic literature; the scope of information is usually of high degree of granularity and primarily targeted to address questions on how insurers can apply it to reduce their costs, optimize efficiency and operating models or imp
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