WRITTEN BY ROB LODESKY
In this three part blog series, we will take a look at the cyber insurance industry, its evolution, obstacles to growth, and how IoT gateways may help this industry provide critical solutions to their most pressing problems.
How will IoT change the cyber insurance industry?
In 2004, drivers in Minnesota in need of auto insurance were given a choice. They could purchase a standard auto insurance policy, which looks at driving history, driving record, and numerous other metrics to come up with a premium and price by your typical auto insurance company or they were given the opportunity to buy the United States' first usage based Insurance from "MyRate". The insurance company would install a Usage Based Insurance, or UBI device, into their vehicle, and their driving behavior would denote the price of their insurance. This was revolutionary for two reasons, this gave insurers the freedom to control the variable which was the primary variable in likelihood of using insurance, driving skills, it also gave the insurance companies a vast data set in which they could measure, with absolute precision, the risk they were taking in insuring their customers, and thus, the cost they should charge each specific customer. Prior to this, insurance companies could use a sample size, build a model, factor in a few variables, and hope the model was close.
How does this relate to industrial automation?
Data is at the heart of any insurance policy, data allows an underwriter to find patterns they need to confidently assess the risk of insuring a client. In today's world, cyber insurance companies are looking at IoT technology as a tool to find the data necessary to predict, with more precision than ever, the risk an insurer takes when holding a policy.
Stay tuned for the three featured posts:
Part 1 begins with the history of cyber insurance, and introduces some of the inherent problems with insuring corporate entities against attacks.
Part 2 dives deeper into the issues presented in part one, and provides possible technological solutions, both currently in use, and proposed.
Part 3 advises customers on how to work with insurance companies to prevent attacks and how IoT edge gateways can work in tandem with preventing attacks.