As the Internet of Things grows, the number of sensors in our world is dramatically increasing. The ability of these sensors to capture and deliver data in real time can create a future where people and companies can observe events and respond with action more quickly than ever before.

Sensors are already a part of our daily lives: the average smartphone contains a variety of sensors, including an accelerometer to measure motion, a pedometer to measure the steps you’ve taken, and a fingerprint sensor for added security. Sensors also enable a range of popular devices, such as bracelets that track our physical activity over the course of the day to help us improve our health and smart thermostats that learn our habits to customize the temperature in our homes. Ultimately, sensors enable us to more fully understand and control the conditions that affect our lives.

Sensor-based devices are also helping insurance companies provide clients with new, customized services that can mitigate risks. At AIG, we recently partnered with one of our clients, a car rental company, to create a pilot project testing whether we could: 1) incentivize smooth driving—that is, maintaining safe speeds, not accelerating harshly, and not using ‘hard breaking’, and 2) find out whether smooth driving was an indicator of safe driving. In this test, sensors in the client’s fleet of vehicles collected data in real-time to help develop a ‘smooth driving score’ for each driver who chose to participate. To further encourage safer driving, we created a contest that rewarded the smoothest drivers with prizes. Not only was this game extremely popular with drivers, (less than one percent of drivers opted out), the contest also succeeded in significantly reducing the number of claims for our client by incentivizing renters to drive more safely. Furthermore, the client was able to engage with its customers in a unique way and further its commitment to road safety in partnership with AIG.

At AIG, we believe the future of insurance is proactive risk prevention. The insights gained through sensors enable AIG to better serve our clients; we can help our clients uncover areas of risk and implement tailored solutions to help prevent losses. In partnership with a major university with cutting-edge research in this space, our research team is testing water sensors that can detect abnormal flows in water pipes. With these sensor systems in place, it can be possible for our clients to receive automatic text-message alerts in the event of a leak, or even have the system automatically shut off the water supply to prevent flooding. By encouraging our clients to use water sensors in their homes, warehouses, and other properties, AIG has the potential to protect our clients’ assets from flood damage.  

Alerts sent by sensors can help prevent risks to clients’ property; preventing risks to clients’ health and safety can be more complex. AIG is now working to enable the sensor solutions that can help reduce workplace injuries and deaths in high-risk areas such as construction sites and manufacturing facilities. To help our clients improve their workers’ safety, we’ve invested in Human Condition Safety. This startup is developing solutions, including wearable sensor devices for workers, which have the potential to reduce workplace accidents, improve efficiency, and help AIG and our clients gather real-time data to better predict and prevent risks. Effective feedback based on data from wearable sensors has the potential to help workers learn to adopt safer behaviors. For example, a construction worker who receives repeated input from wearable sensors reminding him that he is lifting heavy objects in a way that causes back strain may, over time, change his habits and move more safely while lifting equipment at work. In addition to helping provide feedback to workers, sensors may also give insurance companies and clients the data needed to learn more about how to prevent common workplace injuries.

In fact, AIG has a large volume of claims data: our nearly 100-year history gives us remarkable insights into what causes accidents of all kinds, from slips, trips, and falls in the workplace to fires and floods. By applying advanced analytics such as Natural Language Processing and machine learning to our data, we are finding patterns in what is causing common accidents and injuries for our clients. Understanding the core factors that cause accidents and injuries helps us to identify target areas where we can apply sensors and the Internet of Things to create solutions that help reduce risks. In addition, programs such as Client Centric Analytics are accelerating AIG’s capabilities to pinpoint the risks that drive clients’ losses and to offer solutions that improve clients’ safety to help reduce our clients’ total cost of risk.

As sensors and the Internet of Things evolve, they are bringing new data and capabilities that can improve safety and resilience for businesses and individuals. With these technological advances, the next generation will be able to learn from human interactions with our environment, use machine learning methods to predict adverse events, and mitigate losses before they occur.

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