If you're interested in consumer technology at all, chances are you've heard of devices like the Apple Watch, Google Glass, and the FitBit personal activity tracker. Such devices, known as wearables, are thought by many to be the next big product category in consumer technology, with the potential to revolutionize the way we collect and use data.
Wearables are electronic devices small enough to be worn on the body, either on, in, or beneath clothing. They can gather and provide personalized data on all sorts of activity parameters, such as exercise, sleep, eating habits, and movement. Some, like Google Glass, can record audio and video. The applications for this type of technology are only just beginning to be explored, but already there is a substantial awareness amongst insurers for its potential to upend traditional ways of doing business.
In fact, according to Accenture's recent annual Technology Vision report, 63% of over 200 surveyed insurance executives believe wearables will be broadly adopted by the insurance industry within the next two years. Amongst the foreseeable benefits are a more personalized relationship with the customer, and opportunities to break from traditional insurance business models to offer customized, outcome based services.
For example, wearables like Google Glass with audio and video recording capabilities could potentially provide more and better data on the conditions leading up to an automobile collision. Was a driver paying attention to the road? How fast was the vehicle traveling? Other types of potentially collectable data could be used to better identify a customer's risk profile, and help manage and reduce those risks. The benefits of wearables aren't only applicable to customers, either: imagine adjusters using Google Glass out in the field, streaming pictures, video, and other information back to the home office, for more rapid, accurate, and detailed data collection.
Such new opportunities won't come without challenges, of course. According to the Accenture report, over half of participants expressed concern over how to manage the flood of data that will soon be provided by wearables, while 86% expressed their belief that improved software and machine intelligence will be necessary to address this issue. As a result, insurers will likely be required to become more comfortable managing and working with intelligence technology in ways they haven't had to in the past.
Customer concerns about privacy also need to be acknowledged. According to a PwC report, The Wearable Future, over 80% of customers buying wearables are concerned about invasion of privacy through their devices. As a result, according to Denise Garth, a partner at research firm SMA, technology companies have agreed that customers will own the data from their wearables, and have control over who can access that information. This means that insurers will need to find ways to encourage their customers to share their data, perhaps through discounts, additional services, or other incentives.
Regardless of the challenges, the sweeping changes wearables are likely to bring about to the auto insurance industry, and the insurance industry as a whole, can't be overstated. In the future, such technology will likely be fitted into every device imaginable, from pacifiers to artificial kidneys. The advantages to collecting and understanding the ever-growing amounts of data these devices provide will transform old ways of doing business and blur the boundaries between different industries as wearable tech companies, smart software systems providers, and insurers work cooperatively to obtain the most out of the changing technological landscape. For those who can navigate these changes successfully, the future looks very promising, indeed.
America’s Professor has been instructing future insurance agents and preparing them for their insurance licensing exams for over thirty years. Their online courses through http://americasprofessor.com are designed to replicate the experiences of their on-site courses, while allowing you to learn from your home or office.