The Internet of Things helps insurance firms reward, punish
The more 'quantifiable' you are, the more subject you are to behavior-modification schemes
Solid The more the Internet of Things knows about you, the more that insurance companies are able to slurp that data and incentivize you to walk the straight and narrow.
"You know the way that advertising turned out to be the native business model for the internet? I think that insurance is going to be the native business model for the Internet of Things," said Tim O'Reilly, founder and CEO of O'Reilly Media at his company's Solid conference in San Francisco on Thursday.
His partner in the presentation, IBM's Rod Smith, who holds the wonderfully named position of VP of Emerging Internet Technology, was succinct in his agreement. "I think it is," he said.
Smith should know. Aside from being in charge of emerging internet technologies such as the buzzword du jour Internet of Things (IoT), his company's IBM Healthy Living Rebates program offers an option called Active Track, which provides employees with a Fitbit activity tracker.
"When you use the device and incorporate other healthy habits, you'll earn a variety of rewards and discounts," the Active Track program promises.
IBM is but one company that slurps employees' personal activity habits. According to Forbes, BP, Autodesk, and TokyoElectron offer similar programs, and "Fitbit sells its trackers in bulk to 'thousands' of employers at a discount" along with tracking software. Fitbit offers the same service to world+dog through its Fitbit Corporate Wellness Solutions division, which includes a Fitbit @ Work program that offers to provide employers with "reports on employee participation."
IBM's Active Track program is just one option in its Healthy Living Rebates program, and participation is currently voluntary. But it doesn't take a tinfoil hat–wearing paranoid to envision such programs becoming mandatory – or, at minimum, "strongly encouraged" – as the "quantified self" becomes the norm with the evolution of wearable devices and other IoT innovations.
Fitbit @ Work's promise: no sleeping staffers
The quantified self is not the only data source that the IoT will provide to employers and insurance providers – there's also the quantified driver in his or her quantified car.
"We'll have devices in cars that can do monitoring of your health," said Smith at Solid. "There's amazing things that they can do with computer vision ... looking for drowsiness ... that's information that then comes into insurance companies."
And that's just the driver. As Smith pointed out, today's cars are loaded with sensors, and manufacturers can provide data to insurance companies about how fast you're driving, how lead-footed you are, how hard you brake and corner, and other such data that could effect your insurance rates.
You might, Reg reader, ask what's disconcerting about insurance companies quantifying your health habits and driving style. After all, if you can lower your insurance rates in any way, shape, or form, that's a good thing, right?
Well, maybe. But insurance companies aren't interested in merely reducing rates and incentivizing healthier habits and more careful driving in order to reduce their hospital and repair-shop payouts. They may also find it attract to ensure that rates remain high – or even increase, one would imagine – for those who don't conform to their preset parameters.
You may be able – today – to forego the Fitbit, but you're not going to be able to remove all the sensors from your new Ford C-MAX Hybrid Energi.
And then, of course, there are all the privacy and data-protection questions that the quantifiable-everything IoT presents. As O'Reilly asked at his conference, "What are some of the policies that we're going to put into place around this new technology, as opposed to, 'Hey we're just going to deploy it, and some company will decide what the rules are'."
Guidelines, regulations, and consumer-protection policies are clearly needed as the IoT tracks us. In the current pro-business climate in the good ol' US of A, however, lawmakers are chary of offending their corporate sponsors. Just this Wednesday, for example, in explaining why he was tabling patent-law reform, Senator Patrick Leahy (D-VT) said, "Regrettably, competing companies on both sides of this issue refused to come to agreement on how to achieve that goal."
Note that Leahy – a Democrat, mind you – cited companies as the constituencies that scuttled patent reform, not fellow senators nor consumers nor, heaven forfend, the voters who put him in office.
Not to take the automotive-sensor analogy too far, but corporate power is in the driver's seat in the US at the moment, and if it senses that a monetization stream is threatened, it'll put the pedal to the metal and run over any and all opposition.
In the fast-approaching IoT digital wonderland, to avoid being quantified you'll need to shut off your smartphone, remove that activity tracker, don a vintage Hamilton instead of a smartwatch, and uninstall that Nest thermostat. Oh, and take the bus.
Max Headroom's Blank Reg may have been prescient. ®
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