The Internet of Things (IoT) is an indispensable and growing resource for the insurance industry. Current predictions suggest that by 2020, smart sensors and other IoT devices will generate at least 500 zettabytes of data. This is a staggering number—one zettabyte is one trillion gigabytes.

Many insurers have come to depend on cloud computing to process their IoT data. However, today’s enterprise infrastructures cannot provide the instant insights and actions needed to create intelligent solutions at that scale. Trying to perform all these computations in the cloud will become inefficient.

As a result, there is a growing need for special-purpose, customizable hardware at the edge of the network for tasks and applications where it is not practical or efficient to send all data and processing to systems in the cloud. For example, self-driving cars will need to obey traffic laws, navigate and avoid collisions even when driving through areas with poor connectivity.

This will require insurance to enter the age of a new IoT—the “Internet of Thinking.”

There is broad consensus among insurance leaders that edge architecture will be a game-changer for the industry. Eighty-four percent of insurance executives surveyed for the  2018 Accenture Tech Vision for Insurance agreed that edge architecture will accelerate the maturity of many other technologies. Eighty-two percent said the next generation of intelligent solutions are moving into physical environments already.

But pushing intelligence into the physical world through the IoT is only the first step. Edge architecture will allow insurers to help customers avoid making an insurance claim at all. Some insurers and insurtechs have made significant progress here.

For instance, the tech start-up Aerobotics uses imagery from satellites and drone flights to provide predictive information on crop health. Aerobotics customers can also use a smartphone app to receive customized advice on their own crop scouting. Allianz France and its partners, meanwhile, have developed connected tools that continuously monitor construction sites for risks such as fire hazards, short-circuiting and building deformation as part of a digitized offering for the construction industry.

As more insurers extend their IT infrastructure to reach into the physical environments they serve, they will need to examine how edge computing will affect their established IoT solutions offered with partners like carmakers, industrial equipment manufacturers, tech start-ups and smart-home suppliers.

It is important to note that edge architecture is unlikely to completely supplant cloud computing for processing IoT data. But it is likely to free up the cloud, allowing insurers to put it to use generating the larger ‘meta-insights’ that improve systems over time.

Designing systems to leverage the power of both device-driven instant insights and meta-insights from the cloud will demand a deliberate approach from insurers. They will need to carefully think through storage needs, and to differentiate data assets that are critical to keep versus those that can be discarded once a decision has been made.

Extended computing infrastructure is poised to become the backbone of the Internet of Thinking. To then bring it to full maturity, insurers will need to deliver the right amount of computing power in the right place at the right time.

It’s clear that individuals and society must create new partnerships to deal with the impact of the revolutionary technology changes sweeping the world—but the role that insurers will play remains an open question. Ultimately, finding answers to this question gives insurers an opportunity not only to ensure the sustainability of insurance in a world where traditional business models are being threatened but also give insurers the opportunity to improve the quality of human life.

If you’d like to continue the conversation about the tech trends shaping the future of insurance, I’d love to hear from you. I can be reached using the contact info to the right of this post.

In the meantime, if you’re interested in reading the full 2018 Accenture Tech Vision for Insurance, it  can be found here.

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