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Smart Cities, Smart Insurance

The demographic analysis predicts the world's urban population will double by 2050, the equivalent of seven New York Cities added to the planet every single year.

Our cities need then to get smarter in order to handle this large-scale urbanization and to manage the complexity, while increasing efficiency and improving the quality of life.

The emerging technologies enable the reshape of the urban environments: ultra-low power sensors, web and mobile-based applications and wireless networks allow the real-time update of traffic, pollution, parking, water, power and light, thus improving the economic and environmental health of the cities for residents and visitors.

At the same time, the emerging technologies are enhancing the working conditions and the profitability for the people in the city.

Smart Cities are then becoming a reality.

In general, the smart cities are the evolution of the traditional cities where social infrastructures, such as crowdsourcing and sensor data, provide critical and real-time information in terms of urban resilience and disaster recovery and meanwhile the smart cities are improving the cross-city services, transportation management systems and energy use with a tangible and positive effect on urban quality of life.

Thus, a smart city could be defined as an urbanized area where multiple sectors cooperate to achieve sustainable outcomes through the analysis of contextual real-time information shared among sector-specific information and operational technology systems.

A Smart city is thought in six parameters: Smart Economy, Smart Mobility, Smart Environment, Smart People, Smart Living and Smart Governance. These six parameters identify the heart of a smart city.

In this kind of environment each citizen is becoming both a data source and a data recipient that gives and receives information in real time, thanks to the "smart things" that he/she owns and that are linked to the smart city facilities.

The availability of real time information through the emerging technologies of a Smart City allows the creation of digital business opportunities, called "business moments", that might last only few seconds.

The Business moments exploit the connection of people, business and things and allow Insurers to innovate for entirely new scenarios. So in the Smart cities, all the interactions can be adapted in real time to capitalize on business moments and insurers can take advantage from these specific transient opportunities that include people, data, process and the Internet of Things.

Business moments will become the building blocks of new Insurance business models as they blend the physical and digital worlds. In this scenario, the Insurers could gain a number of benefits in terms of streamlined processes and more efficient data-driven decisions.

Some examples can better illustrate the variety of opportunities that encompass the business scenarios:

  • Imagine yourself on a Saturday morning, in a typical suburban flat: you turn on the washing machine and go to the market. Suddenly, the washing machine goes out of order and a lot of water starts to break out from the pipe, on the floor all the room, while you are out! What a disaster! What will happen? Will you come back home and find a situation that might have damaged also your neighbour?

    If live in a "smart house", you will have already have been notified and your insurance company will send data and ask for your approval for assistance.
  • You are at the traffic light and, as soon as the light turns green, you rapidly sprint, but on the other side of the street there is a reckless car that passes the crossroad. You suddenly brake, but unfortunately you hit the car in front of you; the air bag opens and hits your face and everything goes black.

    And now? The sensors of your smartphone detect the sudden deceleration and send alerts to the phone's virtual personal assistant (VPA). It quickly interrogates the sensors in your clothing for vital signs. The VPA quickly sends the data to medical emergency first responders, that will come to help you.

    Thanks to the black box inside the car, the Insurer can analyse all the phases of the accident and speed up the settlement assistance.
  • During the night, while you are sleeping,  there is a storm that breaks the window of the garage and the house domotic system notifies your insurance company of the loss via a prepopulated Web form and it sends size and details for the broken window along with a recorded video by a security camera of the incident. The insurance company receives the first notice of loss from the house and sends an SMS message to your mobile phone for approval.

Thanks to the advantages of the business moment made real by the smart cities, Insurers become smart: Smart Cities, Smart Insurance.

Source: RGI Group