Points of View
More Security and Risk Research
Insurers must not underestimate the need to secure the data they collect through IoT
Technology is developing at an impressive pace, and with it, so is the amount of data we generate. Insurers must leverage this growing resource. Historically, valuing risk has been very difficult—it’s virtually impossible to assess each customer individually. But, by deploying IoT, insurers can significantly increase the amount of data they hold and use it to instantly evaluate risk on an individual basis. Instant, individual risk assessment is only one application for big data and the IoT in the insurance industry; there are other possibilities, too, such as fraud detection. As the old saying goes, “With great power comes great responsibility.” If insurers hope to maximize efficiency by using more data, they must understand that securing and storing data is a complex task. If they fail, they risk consequences, including public scrutiny and hefty government fines.
IoT is a frontrunner for enabling mass data collection for insurers; the potential is limitless
Previous research from HFS discussed the need for insurers to move toward a predict-and-prevent model by leveraging the IoT, and the benefits would be huge. Insurers cannot underestimate the sheer amount of data needed to create such a model, however. Currently, it is believed that 2.5 quintillion bytes of data are produced every day and that by 2020, IoT will consist of over 30 billion connected devices. For insurers, this means a lot of data to secure and store, which isn’t cheap or easy!
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