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The IoT keeps ahead of the curve

At Berkley One, a Berkley Company, one of our main goals is to stay ahead of the curve by asking, “What’s next?” We believe risk management should be designed not just to address current issues, but also leverage technology and respond based on what’s evolving. As a Risk Management Consultant, one of my favorite parts of the job is keeping in touch with what’s new and what’s next—and helping clients and agents to answer questions on how to respond to new technologies. The Internet of Things (IoT) is one emerging technology that’s worth keeping up with.

In today’s ever-connected world, it can be hard to strike the right balance between embracing new technology and allowing it to distract and overwhelm us. Even Microsoft co-founder Paul Allen explains, “Technology is notorious for engrossing people so much that they don’t always focus on balance and enjoy life at the same time.”1

IoT is a series of technologies that can actually help with this conundrum. Through the power of interconnectivity, IoT allows us to manage many aspects of our lives instantly, without thinking or worrying. The goal is to make our smart devices work for us, so that we can spend less time managing our homes (and our devices!) and more time enjoying our lives.


Breaking down IoT: what can devices do?


So what is the Internet of Things? In its simplest terms, the IoT is a group of everyday devices that are now connected on one centralized network. It has been said that the IoT is the next step in the evolution of the internet itself, and that it can improve the way that we live, learn and work.2 The IoT is now in many of our homes, allowing us to control lights, thermostats, robot vacuums, security cameras, coffee makers, door locks, sprinklers, wearable smart watches and countless more devices. A great example that you’ve probably heard of before is a smart home.

Smart homes bring together distinct, connected IoT devices and automate them so that the home can run effortlessly on its own.3 They are loaded with possibilities to make our lives more convenient and comfortable, which you can read more about in my last blog post.

Whether dialed in to your integrated smart home or standing on their own, the world of IoT devices is seemingly endless. They range from practical (trackers to help find lost keys) to recognizable (personal assistants like Amazon Echo) to fun and unique. Did you want an egg tray that lets you check how many eggs you have at home while you are out at the grocery store? You can do just that with a Quirky Egg Minder. How about a dog feeder which allows you to watch via a connected camera, and deliver your dog treats for being a good boy? Furbo has an interactive camera that lets you talk to, hear and reward your furry family member from anywhere.


On the cusp


Many experts believe we are on the precipice of a new technological revolution with the IoT at the center.4 It’s estimated that there will be more than 24 billion IoT devices on earth by 2020—which equals close to four devices for every human being on the planet.5

Manufacturers have been connecting devices to the Internet before we even had a name for the Internet.6 So why the explosion in devices now? Two key advances over the last decade have placed the IoT at the cusp of technology today.

The first is mobile technology, including both the growth of mobile devices and the availability of wireless connectivity. By using our smartphones as the hub of our own connected network, we can now directly and easily control all of our devices from almost anywhere. The second is the rising affordability of the actual sensors within IoT devices which constantly capture data to connect our physical and digital worlds.

The more the IoT grows, the more potential it brings. That’s because it isn’t a single technology, but rather the connection of these data-capturing devices and services which can measure and control aspects of the world around us. As these devices connect and share data with each other, they become able to not only make instant decisions, but also to anticipate what we need before we need it.


Benefits of the IoT at home


Where the IoT and insurance meet is where many of these devices gain the most traction for homeowners. IoT devices can offer many benefits—from completing personalized tasks in your home to sending you early alerts to aid in risk avoidance. The best devices can help shift your focus from reacting to issues that arise in your home to being proactive in its upkeep, making potential losses easier to predict and prevent.

For instance, network-connected water shut off devices combine detection with action to bring protecting to your home to another level. Installing a smart home electronic water shut off device will not only alert you to a leak within your home, it will also instantly close your water valve to prevent further damage. It can prevent the leak from running undetected and leading to plumbing system failure, which can cost you an average of $5,092 per loss.7

A smart security system also can offer a similar level of active protection. Systems can detect when someone approaches your home, and then alert them that they are being watched. It can deter the unwanted visitor, helping you prevent a loss before it can even happen. Some insurers may offer premium credits for the installation of such devices, or for installation of other home monitoring systems like fire and burglar alarms.


Smarter cities


Beyond your home, the IoT has a role in the communities of the future, as cities begin to use these devices to connect their residents and improve infrastructure. The same IoT sensor technology that can collect and transmit information about the leak in your basement can also monitor things like traffic, waste management, air pollution, or security levels and help communities with faster fire assessments. 9 10

This technology is already hard at work around us. In Chicago, the rodent population is being controlled by predictive sensors that determine which trash dumpsters are most likely to be full and attract rats.8

IoT offers tremendous potential to improve city operations and living. In theory, a smart city works much like a smart home, linking data from its IoT sensors to connect the community, improve municipal operations and, perhaps, offer residents benefits they have never had before. For instance, it’s estimated that nearly 30% of all urban congestion is created by drivers cruising for parking spots.11 Might traffic problems be diminished by letting drivers know exactly where an empty parking space might be? If so, the IoT may soon be able to make your rush hour less rushed.


Pressing fast forward


What does the future hold for the IoT market? It’s expected that these devices will become so universal that, one day soon, they won’t even be known as the Internet of Things. Instead, they will become as widely accepted and ingrained into our lives as computers and cell phones.

However, just as cell phones in the mid-1990’s brought both obvious advantages along with concerns about data privacy and cybersecurity, today’s IoT devices also pose security challenges as the technology develops and user adoption grows. I previously wrote about the security issues that can arise from having these devices and ways to help strengthen against possible cyber-attacks.

One of the best things that we can do as both consumers and homeowners is to be aware that new devices are not foolproof, and that we share the responsibility to protect ourselves and our homes. If you are always connected, then you are always vulnerable. So be extra cautious—choose strong passwords, be sure to change them regularly, and take caution that your credentials are not exposed.

For insurance to be an active part of your life, the Berkley One Risk Management team knows that automated technology is not just about the convenience of turning your home’s lights on and off with your phone, or having your coffee machine turned on at the sound of your voice. It’s also about allowing us avenues to be more proactive in our lives, and finding new and better ways to help protect what is most important to us. Asking, “What’s new?” and “What’s next?” and advising on how to intelligently incorporate devices like IoT sensors in your home is just one more way we can help you stay ahead of the curve.

Jerry Forrest is a Risk Management Consultant at Berkley One (a Berkley Company).