The IoT is having a profound impact on the insurance and the reinsurance industries. It stands to reason that as more and more businesses and consumers adopt IoT products, insurance companies end up taking on more risk by the day. One study by Hewlett Packard found that seven in ten IoT devices contain vulnerabilities that can be exploited by hackers. Today, it isn’t just laptops and smartphones that are at risk of being exploited by hackers, as most any connected end point is vulnerable. Is it time for insurers to hire IoT and other tech experts to calculate and advise companies on “connected risk”? The following article, while broad in scope, does a good job of bringing some of the real issues in this regard to light.
It’s as uncommon as a plane crash, but large-scale cyber attacks can be every bit as expensive for an insurance company. A William & Mary senior won an award for his essay that investigated the threats and costs stemming from cyber vulnerabilities.
Luke Schwenke ’19, a data science major from Warrenton, Virginia, earned first place in the Intermediaries & Reinsurance Underwriters Association’s2018 Scholars Program Essay Contest. His winning essay earned him a $10,000 top prize from the IRUA and publication in the most recent edition of their quarterly journal for insurance industry professionals, the Journal of Reinsurance.
Titled “Insuring against Unknown Cyber Attacks in the Age of IoT,” Schwenke’s essay explored the new ways insurance and reinsurance companies must craft coverage policies in the age of the Internet of Things or IoT.