Technology is pushing our personal lives forward at breakneck speeds. We can get directions, order food, and check the weather without ever even touching a screen. Instead, simply asking the right questions out loud gets us what we need. But technology is doing far more than making our lives more convenient; it’s reshaping how we stay healthy, live safely, and manage our day-to-day risks. How we harness and use that technology will shape how quickly and effectively we create a new approach to risk management while laying the foundation for Insurance 2.0.


Internet of Things takes center stage

Much of today’s technological transformation is due to the connection between what we do and the Internet of Things, or IoT. Jacob Morgan describes the IoT on as “the concept of basically connecting any device with an on and off switch to the Internet and/or to each other. This includes everything from cellphones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of … The relationship will be between people-people, people-things, and things-things.”


Tom King, the senior director and industry principal of insurance at Pegasystems, and Keith Gage, vice president in Capgemini’s Financial Services Global Business Unit, write in Property Casualty 360 that insurers must use the IoT to be active participants in their clients’ lives, using the data provided by smartphones, wearables, industrial monitors and other IoT-connected devices to increase their value to clients. “Insurers will differentiate themselves by the value of the relationship they add to their customers, as well as the flexibility of their premiums. Those able to leverage data to provide the best service will be the most successful.”


King and Gage suggest that the insurance industry breaks out of its comfort zone and embraces its new role in risk management. “The IoT is already playing a significant role in managing risk and reducing and predicting claims — defining insurance 2.0. Connected homes can now use sensors to warn owners of the risk of potential fires or flooding. Driverless cars, which might not be able to eliminate car accidents by themselves, will change the balance of risk management and mitigation,” they write.


A Captive Audience

As always, new applications need an interested audience to succeed, and according to writer Chad Hersh, there is no audience more open to new technology than today’s millennials, clearing the path to Insurance 2.0. “They have much different expectations for user experiences,” writes Hersh in Property Casualty 360. “They’ve grown up in a world where user experiences have been defined by Apple, Amazon, and Google and they expect that our systems are built to those standards.”