You are probably familiar with the Internet of Things (IoT), even if you don’t realize it just yet. Internet connectivity is no longer limited to your phone, computer, and mobile device. Home appliances, vehicles, power grids, televisions, utility meters, and hundreds of other things are either already network-capable, or will soon be. These items are often labelled as “smart” technology, which at the most basic level means they can record, send, and receive data over a network.

Currently, most items in the IoT communicate on a machine-to-machine basis, but high-tech medical implants and similar devices promise more person-to-machine communication as the technology develops. The applications are near-limitless, with many innovations sure to come in the near future. That’s especially true in the insurance world, where the IoT is already changing how you get covered.

So What Is the Internet of Things, Really?

The IoT is only possible because wireless Internet access and microchip technology have developed so rapidly. If you need an example, consider the computing power of your current smartphone compared to a desktop computer from, say, ten years ago. Your current phone is probably more capable, even though it’s five per cent the size of an old computer. When technology shrinks, new applications emerge.

So it has been with the Internet of Things. When an appliance, vehicle, or other everyday object is connected to a network, it can record and share all sorts of important information. How would you like a refrigerator that automatically alerts a repair person when it’s time for maintenance? How about a car that tells you when it needs an oil change, alerts you when your tires are low on air, or transmits safe-driving data that can lower your insurance rates? It’s all possible with the Internet of Things.

How Will the Internet of Things Affect Insurance?

When you apply for any type of insurance, you provide the insurer with data. If you’re shopping for health insurance, you might talk about your medical history, and your living habits. With car insurance, you’ll share your driving record and information about your vehicle. This information helps the insurer analyze risk and set your rates, but the old data paints an incomplete picture. With the IoT, much more data is available, which leads to more accurate rates for you. That means more accurate discounts, too! Let’s look at a few examples.

Some insurance companies, especially in the auto sector, are already offering programs that use machine-to-machine communication, as we’ve covered in the past. It’s a give-and-take process, and auto insurance is a prime example. You provide extra data, which allows the insurance company to more accurately calculates the risk of insuring you. In return, you get the potential for lower rates based on safe driving habits.

Looking toward the future, there are many potential applications in health insurance, too. The Internet of Things might one day make it possible to have exercise equipment that relays your healthy workout habits, or even a fridge that sends data about your eating habits. Smart technology also presents the possibility of medical implants that track key health indicators, and alert emergency medical personnel to signs of trouble.

You’ve heard of smart televisions, but what about smart carpets? Sure enough, they’re 

 Among other uses, smart carpets will be a great way to strengthen your home security system. A stronger home security system often leads to better rates on homeowners insurance.

The IoT concept has been around for a while, but it’s taken some time for the technology to catch up to the idea. So in the big picture, it’s all still quite new. The early returns are very encouraging, and we’re really just scratching the surface of what’s possible with the IoT. It’s not just about improving the accuracy of insurance information, or helping your Alberta insurance brokers to get you better rates. The Internet of Things has the potential to improve quality of life in all areas, large and small.

Author:

We Established as Godfrey-Morrow Insurance and Financial Services (GMI) in 2002, the result of the thoughtful purchase and strategic merger of two of Calgary’s most respected and successful brokerages, Bishop-Morrow and Godfrey-Jolin Insurance. This union was fortified by GMI’s President, Hugh McTavish’s passion for the industry, business acumen and commitment to service excellence.