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The Internet of Things
(IoT) –
Reinventing Insurance
Marc Saulsbury
Hartford Steam Boiler / Munich Re
Image Source: Getty Images/iStockphoto
The Internet of Things (IoT) –

March 2, 2017
2017 NAMIC Commercial Lines Seminar- Saulsbury Page 1 of 17

`
“The insurance companies that win in the

next century will be those that insure
least, in that they pay the fewest claims
and they’re the most preventive”
– Andreesen Horowitz
a16z Podcast:
January 31, 2016
Image Source: Hartford Steam Boiler (HSB) © 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 3
IoT (Internet
IoE
IIoT
Industry 4.0 of Internet
(Industrial
Smart, ConnectedThings)
Everything)
of Things)
Everything
Image Source: Getty Images/iStockphoto, Getty Images, Shutterstock © 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 4

What is
Cheap Hardware
IoT?
Cheap
Ubiquitous
analytics
Connectivity
in the cloud
© 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 5
Image Source: Shutterstock © 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 6

Technology is
getting smarter
“Memristors” could bring a new

wave of micro technology and
connected devices at the
atomic level
Image Source: Getty Images/iStockphoto © 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 7
The future is
already here
Sensors can operate more quickly and on multiple
levels. Equipment and devices can be monitored and
controlled with far greater efficiency and with a
capacity to interconnect devices at multiple locations
and of many different types.

2016:
6.5 Billion devices
2020:
Internet of Things
50 Billion devices
Source: “IDC’s Worldwide Internet of Things Taxonomy, 2015,” IDC, May 2015;
“Worldwide Internet of Things Forecast, 2015 – 2020,” IDC, May 2015.
9,000 exabytes
A tsunami of data
Information being transmitted
from sensors to devices at a
ferocious pace
Inter-connected devices will

increasingly be at the heart of
equipment, systems and
operations in business, industry
and homes around the world.

Financial impact of the
IoT technology revolution
$3.9–$11.1 Trillion annually
All Industries are affected
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Big technology platform players
…
Big industrial players
…
The IoT Opportunity for insurance

New IoT-based
Financial Products
New IoT-enabled
Services
Total Insurance
Industry
Premiums*
 15%1 Total Insurance
Industry
(incl. >$700B USD to Premiums
Commercial*)
 40%2 (Primary Perils)
2016 2026
* Includes 2014 worldwide commercial premiums of US$728.6B [$210.3B (28.9%) commercial motor] – Finaccord, Dec 2015.
1 Represents a drop in the premium basis, mostly across primary perils in the next ten year. ”Can a Fixed Cost Property/Casualty Industry Survive the Internet of Things?”, Celent, March 2016.
2 As a comparison, the auto insurance market is projected to decline by as much as 40% due to the expected emergence of autonomous vehicles according to a KPMG study

Well publicized IoT applications
Auto
60% of insurance
15%
of insurance companies companies have
Home
have piloted or launched IoT- based
considered pilots of IoT solutions
Workers’ Health/
Comp Life
Source: UBI Global Study 2016, Ptolemus © 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 15
Powered by the Internet of Things,

Insurance will evolve from
product-centric to service-centric
New Technology
Is Disrupting
Insurance
Rapid advances in technology are disrupting the
insurance industry with a shift towards near-perfect
information that unpacks risk

There Will Be A Shift

Toward Value-added
Services
With near-perfect information, the need to insure
traditional risk decreases and our core value
proposition will need to adapt
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Insurance Will Evolve

Into a Service-first
Solution
We will address the future “business moments”1 of
our partners, client companies, brokers, and facility
owners with service-first offerings that define the
nascent IoT landscape – coupled with insight,
products, etc.
1 Gartner

IoT will change industry and IoT extends business
disrupt insurance models beyond
insurance
IoT creates new

IoT is not primarily about
insurance /
risk reduction
financial product (efficiency, security, marketing & risk)
opportunities
IoT customers are

IoT marketing and
different
products are different (insurers, end customers, equipment
manufacturers, etc.)
Glimpse of the IoT Landscape

Orchestrating Partnerships
an IoT ecosystem
Investments
of partners and
technology
Insurance
entrenched
in the innovation
ecosystem
Acquisitions
Vendors
Sensors M1 Fly M1 Spider
Hardware (Gateways)
Software (Data, Interface)
Web
Services (Integration)
“Meshify is a complete cloud-based Internet of Things (IoT) platform that develops electronic device
management software; offers cross-platform measurement, monitoring, and control; and provides real-
time monitoring and alerts of potential risks and information that improves business operations. Meshify
offers software, hardware, and services that simplify the collection of data; manages complex monitoring;
and displays sensor data in user-friendly web and mobile applications.”

20 software engineers and engineers dedicated
to IoT research, experimentation and deployment
 Convenience Store
>9,000 >2,700 11  Grocery Store
sensors locations occupancies  Schools
deployed installed  Churches
 Dry Cleaners
 Apartment & Condos
 Medical Offices
>220 45 >45  Restaurant
technology technology alerting algorithms  Office Buildings
companies solutions from developmental  Hotels
evaluated tested to production stage  Machine Shop
IoT is Alert and notification design?

Data export and distribution?
HARD
Real-time monitoring?
Installation options? Real world physics problems of time, space, connectivity
Communications technologies?
Use case selection? Location selection?
Front-end apps and UI?

Sensor package selection?
Service provider network?
Problems to
Hardware support and maintenance?
Partners and technologies? Solve Data analytics?
Customer enlistment? Software and middleware?

Financial guarantee?
Machine learning? Predictive maintenance?

Data encryption (in transit and at rest)?
Core data storage and architecture?
Inventory management? Program management (contact updates)?

Connected Home
Perishable Goods

Medical Office
Image Source: plainpicture/Westend61/Florian Küttler © 2017 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. 27
Schools

Sensor Array – Example
Electrical equipment monitoring
Temperature sensor
Typical
School
Temperature sensor
Water sensor
Temperature sensor
Temperature sensor
Ambient humidity sensor

Equipment monitoring Vibration sensor
Temperature sensor
Water sensor
Air Quality

and many more
Business
Interruption

With near-perfect information, the need to
insure traditional risk decreases and our
core value proposition

will need to adapt
From
insurance to
ASSURANCE
The Internet of Things

(IoT) –
Marc Saulsbury
Hartford Steam Boiler / Munich Re

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The Internet of Things

Image Source: Getty Images/iStockphoto

The Internet of Things (IoT) –

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 1 of 17

“The insurance companies that win in the

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 2 of 17

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 3 of 17

“Memristors” could bring a new

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 4 of 17

Inter-connected devices will

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 5 of 17

$3.9–$11.1 Trillion annually

All Industries are affected

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 6 of 17

The IoT Opportunity for insurance

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 7 of 17

Powered by the Internet of Things,

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 8 of 17

There Will Be A Shift

Powered by the Internet of Things,

Insurance Will Evolve

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 9 of 17

IoT creates new

IoT customers are

Glimpse of the IoT Landscape

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 10 of 17

Sensors M1 Fly M1 Spider

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 11 of 17

IoT is Alert and notification design?

Installation options? Real world physics problems of time, space, connectivity

Front-end apps and UI?

Customer enlistment? Software and middleware?

Machine learning? Predictive maintenance?

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 12 of 17

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 13 of 17

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 14 of 17

Electrical equipment monitoring

Ambient humidity sensor

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 15 of 17

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 16 of 17

core value proposition

The Internet of Things

2017 NAMIC Commercial Lines Seminar- Saulsbury Page 17 of 17

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