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Peter Bonney, Disruptive Technology, Architecture & Delivery, IAG
Decades on since the invention of internet, the Internet of Things (IoT) has shot to stardom as the next big thing set to transform how we access, share and collect information. It is hard to scroll through a news feed or pick-up a paper with out seeing how companies across the globe are tapping into the potential of the IoT.
The Opportunity for Change
The IoT refers to the expansion of the internet beyond a network of connected computers and smart phones to include any physical object. The potential of the IoT is limit less, but devices can include anything from connected clothing to autonomous cars to house hold objects like fridges or smoke alarms.
The IoT has opened up new opportunities for technology to change the way we live, work and play. Through augmenting every day objects with technology we gain access to a flood of new data and contextual information which can be used to create value where none existed before.
"IoT devices, platforms and protocols are all fast- evolving, with popularity and adoption based on consumer tastes and preferences"
For businesses, access to data and ecosystems enabled by the IoT can help to model customer scenarios, create more meaningful interactions and accelerate innovation. For customers, this could mean fairer pricing for usage-based services, more connected and convenient interactions and tailored product or service offerings from businesses.
Insuring the Future
In the insurance industry, the IoT is bringing significant disruption to the bedrock of the industry and a change to the way insurers under write their products and price risk. With greater data and transparency, insurers can provide a heightened level of pricing personalisation to suit different customer needs.
The ability to tap into data collected through the IoT enables organisations to become more aware of the market environment, enabling them to provide more relevant services and experiences for their customers.
The longer term value of the IoT exists outside of the traditional pure-play insurance models. The IoT has the potential to drive a shift from insurance to assurance through leveraging data to create an enhanced level of protection for customers.
Through this new technology, insurers can explore new pricing models that reward good behaviour and create more personal customer experiences based on preferences and historical trends. This also enables insurers to become more proactive and responsive through tracking new and emerging customer issues and themes.
Harnessing the Potential
The strength of the customer value proposition varies greatly depending upon the technological ecosystem. While companies are making leaps and bounds in the connected home and autonomous cars, there are other areas like connected cities, healthcare and the broader agriculture value chain where there is the opportunity for greater development.
Generally IoT devices, platforms and protocols are all fast-evolving, with popularity and adoption based on consumer tastes and preferences. To innovate successfully, companies need to focus on a robust customer value proposition over inventing uses for popular technologies. Genuine innovation will come from a deep understanding of the customer and how you can leverage this insight to enhance and evolve the customer experience.
The platform at the centre of the IoT experience is the real source of value as opposed to the end device. This is because the most popular technology devices used to gather the data or provide this functionality are likely to evolve over time. In order to develop a truly innovative or disruptive product, it is essential to look beyond the product to the broader value chain.
Adopting a test and learn philosophy and being open to failure or reinvention is also key. Investing significant time and resource in developing an extensive solution without testing an idea or prototype with customers will likely come at great cost or mean when the solution is redundant before it launches.
Likewise, the implementation plan needs to be flexible to emerging protocols, standards and devices as they enter the market. Other wise there is the risk that the device may become obsolete in a very short lifetime.
Leading the Charge
The true potential in the IoT lies in the ability to transform every day aspects of life into more engaging and connected experiences. The two main spaces where companies are playing are in autonomous vehicles and connected homes.
Major players like Samsung, Apple and Google are already beginning to deliver new product innovations, like the Samsung Smart Things toolkit which enables the user to monitor and control their home from any where.
An interesting overlap between the two ecosystems is Tesla, who through battery powered cars and the PowerWall is looking to reshape how homes generate and consume electricity. This development has the potential to significantly disrupt power companies in much the same way that IP networks have impacted traditional telephone services.
The collaboration between Google and Levis for Project Jacquard proves it is not just the technology companies leading the charge. Project Jacquard redefines the word wearables through transforming fabric into an interactive surface which can be tapped or swiped to control a mobile device. This transformative technology creates a new way in which to connect our devices to the clothes we wear.
The measure of success for the IoT will be the ability to make it native to its environment – in a similar way we have adapted to the smart phone. Companies which create seamless and subtle interactions between people and technology will thrive. Those who look beyond products to create new ecosystems which provide a better connection with the world around us will be the big disruptors.