Random Thoughts: Wearables

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Last week a few people on Twitter pointed me toward Mark Breading’s INN PoV on the risks and rewards of wearables for insurers; I thought I’d add a few comments. [1]

The rewards for insurers are most obvious in the B2E area, i.e in the support of underwriting and adjustment. Thinking one step ahead, this also applies to (future?) services in risk mitigation. It is interesting that the consumer wearables Mark mentions are also B2E – employee wellness and health monitoring for insurance applications (i.e. underwriting). Are there any other? As I wrote in [1], the business case is very indirect; the main value is in consumer awareness and education.

Mark names three risks: security, distraction and inter-industry competition. I am confident that we can solve the first two reasonably soon; especially for security, we’ll need to be thinking about cyberrisk in a broader context, where wearables are just one aspect. The third one, IMHO, is really the major threat for insurers. When the value is in the ecosystem, it makes a huge difference whether you start it or follow somebody else in. [2] Being one of the ones to face the customer matters a lot. Also, take the above mentioned risk mitigation services; when risk detection and assessment becomes ubiquitous via augmented reality wearables, what’s to stop non-insurers (aided by some enterprising underwriters) from offering these services to the general public?

Interesting times ahead…

[1] You might want to check out my longish post from January on the subject.)

[2] Or are dragged in kicking and screaming 😉

Insurance Leader, IBM Institute for Business Value

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