Seeing “IoT” everywhere? It stands for the “Internet of Things,” the name given to the network that has been created by everything connected to the internet besides computers.
The “things” are all those devices that contain software and sensors or “actuators” that can send and receive data over the internet. Your computer has its own specific identifying code, called an IP address. Each device also has an individual signature. According to an industry journal, online-capable devices increased 31% from 2016 to hit 8.4 billion in 2017.
So how many things are actually connected? That’s a point of dispute. The current count is “somewhere between Gartner’s estimate of 6.4 billion (which doesn’t include smartphones, tablets, and computers), International Data Corporation’s estimate of 9 billion (which also excludes those devices), and IHS’s estimate of 17.6 billion (with all such devices included),” according to the IEEE Spectrum. Harvard Business Review says experts estimate that IoT data and connection to people will evolve into a $7.1 trillion marketplace in two years.The IoT is about connectivity, which means not just data gathering, but data sending. When a home’s deadbolt door lock is “smart,” that means it is connected to the internet. It can receive data sent by an app, from a phone or tablet, that allows you to unlock the door from work. Or from France.
All kinds of objects can now be “sensed” and controlled across data networks. A whole new class of metrics has been developed to measure the effectiveness of using the IoT to improve efficiency, accuracy, and profit when compared to having to do everything manually.
“Things” can be nearly anything that can hold a chip. It’s amazing how this category of data gathering has exploded in just a few years. It is most efficiently used in industries and places where it is difficult, expensive, or impossible for humans to gather the data. One example is tracking herds of livestock feeding in mountainous regions.
The IoT has certainly changed the traditional insurance business model, replacing ambiguity with science. Connected devices gather data about costs, but also predict when claims might occur, better quantifying risk and even allowing consumers to be warned, in some cases. Our company uses data to monitor individual addresses for weather damage, specifically, severe weather damage from hail. The Nest Thermostat causes the lights in a house flash to alert customers to an emergency.
In the last decade, the healthcare industry has made a focus shift from illness to wellness. Similarly, the insurance industry is now beginning to favor prevention over restoration.
The average American has three connected devices. In just three years, that number will be more than a dozen.