Atlas Magazine March 2016

The insurance of connected items

The life of insurers is no longer that rosy path where everything is paved in gold. The unstable environment where they are operating does no longer allow them any respite.

While their leeway has been shrinking from year to year and from crisis after crisis, they are in 2016 facing digital revolution which is at their door steps threatening to sweep everything.

Tomorrow's insurance will make recourse to smart machines connected to risk sensors. The data gathered will be used to feed in the databases connected to electronic platforms from which quotes will be made, contracts managed and claims settled. All without human intervention, uninterruptedly and in real time.

With autonomous tools in place, there will be no need for an underwriter to price risks, the smart object, by definition, will do it on its own. Autonomous cars will be automatically connected to an insurance base in order to notify the risk and trigger the of pricing process.

The underwriter, a physical entity, owner of the object shall be subsequently informed about the amount of the premium withheld from his account. This scenario will be replicated to all personal line, health and homeowners’risks.

In the long run, insurance agencies will be doomed to disappearance and the market will be made up of virtual entities interacting with one another.

In this science fiction scenario, inaction would be synonymous to death. Henceforth, insurers will not have to be present and manage the daily tasks, but they will be compelled to act, shake things up embark on new digitization project and manage the change.

Atlas Magazine N°129, March 2016

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