Every day, I get a constant stream of insurance news feeds. Lately, they all seem to be centered on the Internet of Things (IoT): driverless cars, sensors, FitBit type devices, and the like. These devices collect millions of pieces of data each minute – how many steps I took yesterday, how long I slept, how much milk I have left in the container, if I had a lot of hard-braking yesterday while I was out driving, etc. We are all being monitored, whether we choose to believe it or not! If I had to take a guess, I would say the majority of you don’t want to think about that, as it can be a little overwhelming and in fact a little scary. But the reality is that as new technologies are being released to the market, whether it’s a car, gadget, smoke detector, laundry detergent, or something else, many will be outfitted with sensors that feed information somewhere. It might be to a retailer like a Target, a security company like an ADT, or even your insurance carrier. Don’t worry, sooner or later you will become numb to it like anything else and maybe even see it as something good – at least that’s where I am at with it.
So now, you are probably thinking “why are all these companies building sensors into their new product releases?” Is it really because they care about me and want to help me, want to alert me to take action, keep me safe? Or, are they motivated by achieving certain KPI’s like lowering their expenses, increasing sales, improving profitability, or maybe even improving their customer satisfaction scores. You may also be thinking: how much is too much in terms of my data and privacy?
If I could answer this question from the standpoint of insurance, as both a consumer and an insurance expert, I would say it’s a combination of all of these factors. Carriers want to keep their customers safe and prevent losses but we still have to remember that they are in business for a reason: to make money. The key for insurance carriers is to balance messaging with safety, compliance, doing what’s best for both their company and customers, and most of all maintaining their customers’ privacy.
Imagine for a moment the following potential scenario: you are driving with a telematics driver tracking device linked to your iPhone (remember that this is something that you agreed to download from your insurance carrier in exchange for a potential discount for good driving behavior). Keep in mind that your phone knows exactly where you are driving (city, road, and intersection) because you have location tracking turned on. Your phone also knows what weather you’re experiencing based on your GPS location. Your insurance carrier receives an incoming weather report that tells them a hailstorm is supposed to hit the area in which you are driving in the next half hour. You get a text message from your insurance carrier that says, “Hi Allen, we want to keep you safe. There is a hailstorm expected to hit your area in the next half hour. Here’s a $2.00 off coupon to grab a cup of coffee at a location in a safe zone.” Later you get another message that the storm has passed. “It’s now safe to get back on the road.”
What’s running through your mind at this point? Probably those same questions I posed earlier. Keep in mind that your insurance company’s actions are well-intentioned, but that this requires balance and an understanding of all the rules around privacy and opt-in. Without that, we may open ourselves up to myriad new issues that could be viewed in a negative fashion.
This is just one possible example. Like other IoT devices such as alarms, sensors, and health devices, we will need to tread lightly regarding using information gathered, be explicit with the value proposition and completely transparent with our customers. It’s not something companies should jump into quickly – test your way forward instead.
My advice is that if you are thinking about building solutions that are preventative in nature or are intended to cause a consumer to take action, look at it from all angles but most importantly from the privacy standpoint. We are entering a new era. It requires balancing company objectives with what’s right for the consumer, always keeping privacy top of mind.
I recently saw this anonymous quote which really made me think about the future and how we think about actions with our customers:
Always do what is best for your customer… if the business doesn’t agree… start looking for a new place to provide excellent customer service.