How can incumbent insurers transform digital threats to opportunities?
The collection of data from IoT has huge implications for insurance, both as opportunity and threat.
When it is possible to collect real time data from homes, vehicles and individuals, what will be the implications for dynamic risk calculation, and even liability allocation? If risk assessment changes from actuarial calculations based on relatively few broad factors to a calculation based upon real time data and individualised history interpreted by AI/ML, what are the implications going to be of that, and will legislation need to be developed to ensure some degree of risk-cost sharing?
And will the insurance industry begin to fragment? Micro-insurance, sharing insurance, peer-to-peer insurance, personalised pricing, new forms of insurance such as Cybercrime
Who will be the winners from this radical change? Incumbents have many advantages such as expert domain knowledge and decades of data and loyal customers. Conversely, they have deeply embedded legacy IT not designed for this new world or investment to disrupt specific markets where they have a vested interest in maintaining the status quo
Specifically, though, to me, a knowledge and understanding of large volumes of data and how to collate, handle and interpret it is a pre-requisite to succeeding in this space