By FINTECH Books Contributor, Paul Schulte
Insurance now at greater risk of sudden decline than banks, media or retail during the past few years. Traditional insurance providers spending billions on advertising with no gains. Insurance companies are fighting a very expensive rear guard action against a rapidly growing foe which has no marginal cost — the pure online insurance product which is based in the cloud — no humans, no wasted time, no paper.
Current customers of insurance are unhappy with their experience and can take their business elsewhere to online firms like Zhong An and receive insurance for anything, anywhere, anytime. This is because the billions of smart phones (with 14-20 sensors and offer a vast store of risk data) and the tens of billions of sensors (which offer risk data on homes, ships, rigs, cars and buildings) allow firms which can handle billions of data sets to create a whole new assessment of risk to calculate premium and to diversify portfolios.
He who controls billions of data will win. Data from the internet of things can now allow tech-savvy firms to aggregate billions of pieces of data from wearables, cars, pipe systems, oil rigs, locks, thermostats and window sensors to find out who is a chronically bad driver who brakes hard, drives at night and texts while driving.
It can detect the imminence of bankruptcy, frozen pipes, pregnancy, fire, accidents on oil rigs, water leaks, burglary, and much more. Insurance products can be offered for an afternoon of surfing. They can be offered for a certain train ride or to guarantee return of purchased online goods. All of this is possible for those who can secure the technology to process, translate and control the vast ocean of information.