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January 21 2015 | Denise Garth

The Consumer Electronics Show (CES) has been the preeminent show for seeing, hearing, and feeling what is emerging and hot in consumer electronics at the beginning of each year. It is the place to go to see new electronic games, mobile devices, TVs, home appliances, and other electronics that will be coming to market to amaze, excite, and surprise us. Remember Onewheel, a self-balancing, one-wheeled, motorized skateboard? Occulus Rift virtual reality? The curved HDTV? Or the best in laptops, tablets, and smartphones?

This 2015 CES show may just turn out to be the inflection point for the CES ... where it will become the leading show of emerging technologies that should be of keen interest for businesses, especially insurance. It is the place to find new ideas and products and get a good look at potential customer excitement and interest. It may also be a place to announce partnerships using these technologies. And, this marks a pivotal point for emerging technologies: here they are real, being innovatively used, creating customer interest and demand, and positioning new market leaders. It is the year where new products will go from science fiction and future thinking to main street reality demanding strategies and plans! Move over, George Jetson, the future has arrived! (And for insurers, the future starts right now!)

Emerging Technologies

The growing proliferation of emerging technologies seen at the CES is considered by many to contain some of the greatest change agents since the introduction of the Internet, offering game-changing breakthroughs that will challenge businesses in many ways. In our 2014 research report, Emerging Technologies: Reshaping the Next-Gen Insurer, unique insight into the adoption, investment plans, and opportunities for business of nine emerging technologies reveals the vast potential for disrupting or transforming insurance. The research found that adoption is being led by the Internet of Things (IoT) followed by wearables, artificial intelligence (AI), and drones/aerial imagery, with driverless vehicles coming up quickly behind. In fact, five of the nine technologies are projected to arrive at or go well beyond the tipping point within three years, and all nine to surpass the tipping point five years.The CES show has quickly reinforced this view. Insurers that have not accepted as fact the fast-paced adoption and impact of these emerging technologies should take great pause. And here are a few reasons why:

Autonomous vehicles became one of the hottest items during the show, and even before. Audi drove their autonomous vehicle from Silicon Valley to Las Vegas, generating pre-show buzz. Kicking-off the show was Mercedes showing a concept car that looked more like a futuristic living room than a car. These and the other major automotive companies all demonstrated their acceptance, commitment, and fast-paced adoption of this new form of transportation introduced by Google just a couple of years ago. At this show, many of these automakers announced their plans to offer autonomous vehicles beginning in 2017! Note they did not make the announcement at the traditional Detroit Auto Show the following week. The future of autonomous vehicles will quickly be a reality, and so much sooner than most thought. So share the road, George J!

The event emphasized the need for insurers to take these emerging technologies seriously and to quickly begin to explore, experiment, and consider their uses in the business.

And then the Internet of Things (IoT) was literally everywhere, exemplified in the connected car, connected home, and wearables ... highlighting a fast paced market that is reinventing how we work, live, and play in a connected world. Wearables with fitness and activity bands were prevalent, along with innovative devices like a pacifier that can monitor a baby’s health. Also included were wearables that were integrated with autos to enable the starting of parked cars. But it was the connected car and connected home that had the highest profiles.

The connected car was touted by many major car manufacturers. Ford, Volkswagen, GM, BMW, Toyota, Audi, Mazda, Daimler, and others were showcasing their connected car capabilities and the growing array of services that come with them. The media noted that Mark Fields, Ford’s CEO, sees Ford as thinking of themselves as a mobility company rather than an automotive company, delivering a wide array of services and experiences via the auto instead of the mobile phone. Added to this are Apple’s CarPlay and Google’s Android Auto systems that mimic and integrate the functions of smartphones on the auto dashboard touchscreen. Quite a reimagination of automotive business! 

All the devices and capabilities for the connected home added to the IoT momentum. Familiar tech companies like Google, Microsoft, Amazon, and Apple along with traditional companies like Cisco, GE, Bosch, Samsung, and others are powering ahead with new and innovative capabilities that will drive rapid adoption. In fact, Samsung Electronics CEO Boo-Keun Yoon indicated that by 2017, 90% of all Samsung hardware (TVs, ovens, refrigerators, purifiers, and more) will be connected, creating a connected home personalized to your unique needs. Many of the companies also announced the development of connected home hubs to integrate these wide arrays of devices from various manufacturers and third party providers. Data from the connected home devices can be used to offer new services. The Jetson’s home is finally here!

And drones were flying everywhere to demonstrate the high interest and potential for many businesses – from phone and video purposes to building inspections, surveying, delivery, weather data gathering, traffic, and much more. The Federal Aviation Administration (FAA) had a booth at the event, announcing that they expect well over 7000 drones in use by 2018. All of this indicated that, literally, the sky seems to be the limit for drones!

Insurance Implications

What does this all mean for insurers? The event emphasized the need for insurers to take these emerging technologies seriously and to quickly begin to explore, experiment, and consider their uses in the business. Why? Because traditional competitors like Progressive and USAA made announcements at the event concerning the connected car and connected home and the potential of new competitors that are looking at how they might leverage these new technologies.  

The SMA 2014 emerging technologies survey indicated that these technologies would reach a tipping point in 3 to 5 years – or from 2017 to 2019. Based on the announcements at the CES about autonomous vehicles by 2017, home hardware being 90% connected by 2017, and large numbers of drones in use by 2018, the estimated arrival time at the tipping point is right on track, or possibly even much earlier. The results? New customer demands and expectations. Decreased risk. New insurance product needs. New service revenues. New competitors. Redefined customer relationships. Reimagined businesses and industries.   

It is no longer science fiction. 
It is science reality.

To stay in the game, let alone win it, insurers must aggressively find a way to engage and embrace these technologies and uncover their potential. And to do so, they must have modern core systems as the foundation to integrate the use of these technologies for innovation, as well as plans to assess, strategize, and pilot some of these technologies, because the future is coming fast and soon.   

The Consumer Electronics Show 2015 has foretold that 2015 will be a pivotal year for many businesses and industries, including insurance, for the experimentation, adoption, and use of these emerging technologies. Change and disruption are coming. Adoption of the emerging technologies is on track or accelerating toward the tipping point. It is no longer science fiction. It is science reality. Welcome to the future … today!

Contact me at dgarth@strategymeetsaction.com if you’d like to learn how SMA can help you on the innovation journey and discover new opportunities for the insurance industry. Click here to learn more about SMA’s research. 


For more information, please contact Deb Smallwood at dsmallwood@stratetgymeetsaction.com