Computers, mobile devices, smart TVs and other connected technology are essential to our personal lives. They can entertain, delight, and connect people and things in new and different ways. We use technology to make our lives easier, safer and more secure.
At the same time, computers, smart phones and other internet-connected home devices create new risks: a reliance on digital information that can be damaged or stolen by a virus or hacker, and computer systems that can be exploited or corrupted by a cyber attack.
|Insurance must evolve
As the demand for new personal technology grows, it will create challenges and opportunities for the insurance industry. In a digital world, where we live and work online, insurance must evolve to cover cyber exposures for people and their homes.
With the proliferation of personal smart phones, high-speed internet and Wi-Fi, homeowners already have the technology to control, with a few clicks, all major appliances, electronic devices, heat, lights, door locks and alarms. In the future, almost every home device will have a "smart" option with remote monitoring that learns about family lifestyles and takes actions to anticipate their needs. Billions of equipment sensors will generate thousands of exabytes of personal data.
Computers and connected home devices network through a home router for internet access, so they can be controlled with mobile apps and websites. They also can be hacked from anywhere in the world, exposing our information and home systems.
|Increased risk of theft, fraud
Technology is changing the way we access financial services — and increasing the risks of theft and fraud. At least 61% of U.S. internet users bank online, according to the Pew Research Center, and that number is growing. In a 2015 report, the Federal Reserve found 52% of smart phone owners with a bank account had used mobile banking.
Personal technology makes our lives easier in so many ways. Yet, consumers are increasingly concerned about cyber risks.
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About 30% of the personal computers in the United States were infected with some type of malware, according to security vendor Panda Labs. (Photo: iStock)
|Increase in malware infections
The top two fears of consumers in a 2016 survey for HSB by Zogby Analytics were a virus; a hacking incident or other computer attack on data or systems; and the theft of money or other property through fraudulent wire or bank account transfer or other deception.
They have a reason to worry.
About 30% of the personal computers in the United States were infected with some type of malware, according to security vendor Panda Labs, and 16 million people had serious problems with a computer virus within the previous two years.
The number of connected devices, meanwhile, is exploding with the Organization for Economic Cooperation and Development predicting a typical family of four will own 24 connected devices by 2017 and 50 devices by 2022. In addition to phones, laptops and tablets, that will include appliances, TVs, connected cars, smart light bulbs and eHealth medical equipment. This Internet of Things creates multiple points of entry for hackers and cyber thieves into homes and phones.
|Personal lines must begin to address cyber risks
Although Identity Theft insurance is widely available for individuals and families, other Cyber coverages such as home systems attack, data breach, ransomware cyber extortion, online fraud and cyber computer attack for individuals have lagged behind commercial products. Personal lines policies must begin to address cyber risks.
Consumers are looking for ways to protect their information with meaningful, reliable insurance protection. It's an adjustment for underwriters accustomed to traditional perils such as wind and fire, but Homeowners and Renters insurance should include Cyber as a basic coverage.
In today's connected world, our personal devices are vulnerable to attack. Our private data is always at risk. With the Internet of Things, smart phones and connected homes, who knows what new threats to individuals will appear as technology evolves?
The insurance industry is positioned to help consumers protect their privacy with products and services that make a real difference, from a source that your customers trust.
Timothy Zeilman is vice president and counsel for strategic products with Hartford, Connecticut-based The Hartford Steam Boiler Inspection and Insurance Company (HSB).
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