Insurance companies, are they up to date?
Not a thought experiment.
Insurance is the basic principle of collective risk assumption (principle of equivalence), in which many pay an amount of money to the insurer in order to receive compensation when a corresponding damage occurs (insured event). The prerequisite is that the extent of the damage can be estimated statistically and the contribution required by each member of the collective can therefore be determined using actuarial methods
Due to digitalization, internet of things — so-called connected world we are able to collect data ourselves and with this data to evaluate our risks. So, do we need insurances anymore?
Car insurance: Work is underway to reduce premiums by supplying information on driving behavior. Millions of car holders accept the data transfer if they get benefits. If, in parallel, the car also permanently sends data on the wear and tear of its parts plus information on the traffic situation, what is the point of insurance?
Life insurance: Life insurance is now only used to secure loans; this will soon be taken over by the bank or a FinTech.
Home insurance: If my house is networked (smart home), it shows me all the necessary information via various sensors. Water pipes report that they will soon become clogged, washing machines that hoses are becoming brittle, elevators that maintenance is due, roofs that there are holes…
Theft and burglary insurance: My smart home also informs me if there have been any attempted break-ins. I catch everyone on camera if the attempt hasn’t already been prevented by “predictive policing”.
Cyber insurance for companies: Nothing else happens in the online world, whether in the corporate or private network, I use sensors to tell me about anomalies and peculiarities in the network and I integrate sensor information into a SIEM and a SOC and/ or use security as a security.
Even to avoid weather anomalies, solutions are beginning to emerge. Just think of the Olympics in Beijing and the blue sky.
Health insurance: Many insurance companies offer discounts if health and activity data is submitted regularly. If an insurance company can analyze this data, so I can, too. I’ll know how long, how often to stress my bones while jogging. I’ll know which arteries are starting to clog. My doctor will tell me what to do about it. But is it ethically justifiable to share health data in particular, some will now remark. Theoretically, it should be thought about. In practice, this data is already shared by many people, and insurance companies are also trying to access this available information. It would remain to stop the digitization. But who wants that ? Not me. Not for the simple reason that digitization offers the opportunity to significantly minimize risks and reduce our fears. Thus, insuring against unforeseen events and risks will become obsolete in the course of digitization.
We will save on insurance in the future. Good for the insured, bad for the insurance industry.
Currently, insurance companies are trying to optimize their processes and risk calculations with the help of digitalization. In the long run, they must succeed in transforming themselves with new business ideas (and the idea is not a so-called FinTech). Otherwise, goodbye insurance.
There is only one insurance that will still make sense for some time.
Liability insurance — because we don’t know what we are doing !
