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The Internet of Things — Back To The Future… All Over Again

When I was growing up, I was a huge fan of the Dick Tracy comic strip and television shows like The Jetsons and Star Trek.

Back then, in the days of rotary dial telephones and party lines, I thought that it would be great if I could talk to someone with Dick Tracy’s wrist radio, or Captain James T. Kirk’s communicator. I dreamed of having a home like the one in The Jetsons that talked to you and anticipated your almost every need.

Flash forward “eh-hem” a number of years and it seems like we’ve certainly charted a course “…to boldly go where no man has gone before.”  What was once a fool’s folly is quickly turning into today’s and tomorrow’s reality with the growth of the Internet of Things.

Just consider many of the innovations that have been announced or introduced in the past five years alone:

  • Wearable technology: Firms like Samsung and Apple have introduced or are working on watch-like devices that allow you to communicate with others via email, text, and live streaming video (FaceTime).  Those same devices can also be used for entertainment — internet, music, and TV — and maintain your personal health-related information.
  • Home automation: Several home automation companies now manufacture Wi-Fi enabled, self-learning devices such as thermostats and lights. Owners can now control these devices remotely using their computers or smart phones.
  • Biometric door locks: Various companies market door locks that can be unlocked using personal biometric information or your smart phone.
  • Household appliances: Certain automated household appliances are now connected to the internet. For example, some refrigerators can be programmed to monitor integrated water filters and order a new one for delivery when needed. They can also be used to display and send emails and texts.
  • Driverless cars: Driverless cars have the potential of serving the future needs of the elderly who, otherwise, might not be able to travel.

Here are some questions I keep circling back to: What is happening to all of the data generated by these devices? What safeguards, if any, are in place to ensure that personally identifiable information (PII) or personal health information (PHI) is protected? How do you protect yourself if you suffer a privacy data breach with one of your devices?

In considering these questions, I say that's where the growing cyber insurance market comes into play.

With the continued progression of the Internet of Things, estimates are that by 2020 there will likely be between 26 and 30 billion devices wirelessly connected to the internet. The IoT is upon us and the future is still to be written. To me the future looks very promising but very scary as well.  As Marty McFly would say in the movie Back to the Future …. “That's heavy.”

Shawn Dougherty

Shawn Dougherty is the assistant vice president of ISO's Specialty Commercial Lines Division. He is responsible for providing the overall direction, leadership, and client service for ISO's cyber liability (e-commerce), D&O (management protection), businessowners, crime and fidelity, financial institutions, employment-related practices liability, and professional liability (other than medical) insurance programs. He is also the ISO product manager for the Lloyd's Wordings Repository, an electronic database of policy wordings and clauses regularly used within the London market. Mr. Dougherty has worked at ISO since 1988.

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