According to Celent's recent report, 'The Internet of Things and Property/Casualty Insurance: Can an Old Industry Learn New Tricks?' by Donald Light , the world is becoming more connected. People, places, and things are using these connections to exchange an exploding amount of digital information and data. This digital stuff is stored and analyzed, yielding predictions, feedback, and control. Celent predicts The Internet of Things will fundamentally change the property & casualty business.
The Internet of Things (IoT) has three, interdependent components: things with networked sensors, data stores, and analytics engines.
"From an insurance perspective, what is new and different and critically important about this data is that it can provide a much more accurate picture of the exposures, hazards, and risks of what is being insured," said Donald Light, Director of Celent's Americas Property/Casualty Practice and author of the report.
"These analytically driven findings create the second critically important consequence of the IoT: insurers can create feedback and control processes to command or request things to change their loss-related behavior and performance."
The report discusses how the IoT will give insurers first order data on a great many hazards and risks, and the ability to create feedback control processes to substantially reduce losses.