Citi analysts have an idea they call 'the Feed' which could completely revolutionize the insurance industry
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Imagine a world where a worker punches the clock and slips on a heart-rate monitor that's tracked by an insurance company.The worker turns on a truck, which alerts the insurance company it's on, and drives to a warehouse, which alerts the insurance company that someone is there.
Every inch, every activity, monitored and measured by the insurance company.
According to analysts at Citi, this is the future of work, and, despite its Orwellian overtones, it's a good thing.
Todd Bault, James Naklicki, and Alex Gifford at Citi identified numerous trends that could disrupt the insurance industry as it's constructed, and one of the most interesting was their idea of "the Feed."
The Feed would be a real-time link that connects businesses, equipment, facilities, workers, and the insurance company, providing real-time updates on how risky a given situation is.
"But the potential here seems higher for commercial lines: with fewer or no privacy issues, and existing pervasive automation, it seems like a smaller step to embed IoT into industrial (manufacturing) and service (venues) processes, not to mention commercial auto activities like trucking and livery," said the analysts. "Employees in certain high hazard occupations could even be wired and monitored, though there could be resistance here."
By monitoring these operations in real time, the analysts think this could lead to a multistage revolution in the insurance industry.
First, since data can be compiled by the insurance providers themselves, they can use that to make a quote and receive a claim, possibly cutting insurance brokers out of the process.
Next, the report envisions that insurance companies could adjust their prices based on the level of risk being undertaken by the company at different points in the work process and time of day.
"With continuous monitoring of the Feed, we could learn when companies present exposures or not (e.g., the plant is closed, the venue is empty) and with what intensity (e.g., the plant is running hot, the venue is only at half capacity)," wrote Bault, Naklicki, and Gifford. "This could allow insurance to be metered like a utility, and at different rates depending upon exposures and intensity."
Further developments - like tailored risk-management training and the ability for companies to shop individual elements of their business to different insurance firms - could also follow.
The analysts admit there could be a few problems, including worker-privacy concerns and regulatory hurdles, but they think that it could draw significant interest from the insurance industry.