How can Hong Kong capitalise on the internet of things?
Alexander Baugh says as the internet of things takes hold, it will lead to greater risk, but also great opportunities to make meaning out of big data
Globally, around 5.5 million new devices connect to the internet every day. Every second, more than 205,000 new gigabytes of data are created, the equivalent of 150 million books. The sheer amount of information generated each day is creating a new technological revolution. Termed the “internet of things” – where any device with an on and off switch can connect to the internet or to one another – this revolution has huge potential.
Hong Kong has long identified the internet of things as an economic driver, announcing this year the aim to develop Hong Kong into a smart city. While the trend presents many unknowns, an AIG survey found that twice as many people were optimistic about its advent rather than fearful.
But what does the proliferation of these devices and data mean, and how can companies and individuals capitalise on it?
Societies have used data for years to understand and mitigate risk, but there has never been a more exciting time than today. Connected devices will help us know more than we have ever known before.
An example is the workplace. Every 15 seconds around the globe, a worker dies of an occupational accident or disease and a further 153 workers are injured.
AIG’s claims data show that our multinational corporate clients pay out in excess of HK$22 million per month for workplace injury.
What if we could use a wearable device to warn workers if they are carrying too much weight, exposed to noxious gases, or standing too close to a dangerous area? In addition to reducing workplace accidents, the data generated could help businesses understand patterns at their work sites, identify injury hotspots and take steps to make their workers safer.
The use of autonomous technology is on the rise. However, if it can effectively think and perhaps even act for us, who or what is to blame when something goes wrong? For driverless vehicles for example, blame is likely shifted from humans to machines in the event of a system malfunction or hack.
For insurers and companies, this means grappling with new risks such as privacy and cyber breaches.
Companies will need to tread a careful balance – work closely with their insurers to understand their most significant exposures in this new age, but also leverage the internet of things to make meaning out of big data for their customers.
Companies, consumers and insurers can work together to optimise the opportunities brought about by an ecosystem enabled by the internet of things, not only to mitigate risk, but to prevent accidents from happening in the first place.
Alexander Baugh is AIG’s global president of liability and financial lines