Expect the Unexpected in U.S. Casualty Insurance Market in 2017: Marsh

Insurers and customers are increasingly embracing the Internet of Things but greater reliance on these technologies could bring problems that ripple through an entire connected system.

The unintended consequences from greater use of IoT will be a major trend in 2017, Marsh’s U.S. Casualty Practice asserts in its report, The U.S. Casualty Insurance Market in 2017: 10 Trends to Watch.

“As the world becomes more interconnected, the boundaries blur between traditional product liability and cyber insurance,” Marsh notes in its report. “In 2017, we can expect to see more unintended consequences from the IoT – leading insurers to ask more questions about their own risk aggregation and possibly change the way they provide coverage for risks associated with connected devices.”

According to Marsh, the level of interconnectivity called for by the Internet of Things is relatively new. It ranges from having the ability to open a garage door from another location (like the beach), to law enforcement agencies using internet-connected microphones and cameras to collect breaking intelligence on shootings, or detect firearm activity.

On the insurance side, telematics with internet connectivity allows insurers such as Allstate to track a customer’s vehicle performance and driving behavior, a form of usage-based insurance that rewards safer drivers with lower rates.

Marsh said that these and other IoT advances will advance rapidly in 2017, but so will the unintended consequences, because “the level of interconnectedness amplifies the potential frequency and severity of adverse events as the impact of an individual loss can ripple through an entire connected system.”

There have been trouble signs already. Marsh reminds that in 2016, a denial of service attack shut down a number of popular websites for hours, using “unprotected, internet-connected cameras, routers and printers.”

Here are Marsh’s 9 other 2017 trend predictions:

Source: Marsh: The U.S. Casualty Insurance Market in 2017: 10 Trends to Watch