Internet Gadgets with Insurance Value

By Douglas W. Grant, CIP, Principal,

Reprinted with permission from “Alberta Broker”, June/July 2001

A little over a year ago the’s could do no wrong.
Then came the infrastructure and fibre guys. Now we all tread gingerly through challenging
times, and the real work of taking advantage of the Internet for the betterment of the
Canadian Insurance Industry is squarely underway. But the Internet is not just about
company or broker Web sites, insurance sales, and data interchange – it already touches
many of the processes we each do in business, from banking to job searches, from customer
communications to risk reduction.

While researching cars, one security measure was a chip
imbedded in the key. Duplicate keys can be cut, but only at the dealership where the chips
in all keys will be reset. Computer chips are indeed showing up everywhere, in most
everything, becoming pervasive.

And then the communications revolution – ever improving
costs, speeds and function. Cell phones, pagers and communicating PDA’s are increasingly common.

The Internet is the convergence of computers and
communications. It too grows – more people using it for more hours each day for more
purposes. As the Internet is increasingly accepted, entrepreneurs among us are creating
new applications, services and gadgets.

Air Conditioning

Carrier Corp. developed remote monitoring capabilities for
huge industrial chillers and heating systems years ago. The air conditioner could notify
Carrier of a slow leak of refrigerant before the problem caused a burnout of the
compressor. Technology advances; costs diminish. In April 2001 Carrier and IBM announced
they would start pilot-testing this summer the “first residential Web-enabled air conditioners.”

In the pilot, about 400 customers in Italy, Greece and
Britain will have their Carrier air conditioners wirelessly connected to the Internet.
With PC or cell phone accessing, a customer can remotely turn on an air
conditioner or change the temperature setting. That should save energy costs compared to
simply leaving the unit running, appealing to those with high energy costs or environmental concern.

Mark Morelli, Carrier’s director of marketing, said
“we’re moving into an age where the technology is enabling something as basic as an
air conditioner to communicate back to the manufacturer.”, providing a competitive
edge in customer service.

Automobile Communications

GM’s advertisements for OnStar position it as a safety and
security system. Available on 34 of GM’s 54 vehicle models, OnStar utilizes a receiver and
embedded cellular phone. Using GPS technology and wireless communications, drivers can
contact advisers for real-time roadside assistance. Optional services include automatic
notification if an airbag deploys, stolen vehicle tracking, emergency services, remote
door unlock, remote diagnostics, convenience services, and concierge services; and more coming.

Early in April, a radio news clip noted a car in California
had reported an airbag deployment. Emergency services dispatched to the scene didn’t see
the car, but did find the injured victim of a hit and run. The reporting car was found not
far away, and charges followed.

Auto Insurance

Progressive Insurance has run a pilot in Texas for three
years for “Autograph” a patented auto insurance program with monthly premium
charges based on the prior month’s actual driving. Where, when, how far you drive, seat
belt usage, driving speed, signal usage and turning and braking action are captured and
transmitted by a “black box” to Progressive, which then calculates premiums. For
an additional monthly fee, the program adds theft recovery, remote door unlocking,
roadside assistance, directional assistance, low-battery detection and a “panic
button” to reach a 24-hour response centre. March 19 National Underwriter, P&C
edition, reports that Progressive has decided to go national with the program.

Best’s April Review indicates that GM and insurers are
evaluating the OnStar system as the information gathering device for usage-based insurance.

Personal Property Inventory

BCAA recently became the first insurance partner for
Sherlock Online’s inventory system. Sherlock Online provides an eBox to securely store the
household effects inventory with descriptions, photos, appraisals, proofs of purchase etc.
With insurance broker or company involvement, co-branded ID labels, key tags and bag tags
can be provided to the customer. Inventory reports, inventory value vs policy cover, loss
reports can all be generated and the contents used by underwriting and claims staff alike.

The system is more than inventory however – the id’s
attached to household items can increase returns of lost or stolen items. This selling
point will be strong for mobile technology items like cell phones, PDA’s and laptops, and
household electronics.

ET Calls Home

Codex Data Systems Canada Inc. specializes in security and
investigative services. Their PC PhoneHome software application will track and locate a
lost or stolen PC or Laptop anywhere in the world. Easy installed; transparent to the
user. If a PC PhoneHome protected computer is lost or stolen, the owner reports to the
local police and calls the 24 hour command center. Codex recovery specialists will assist
law enforcement in recovery. Codex also has software capable of tracking stolen Word and
Excel spreadsheets from a company’s computer server.

Impacting Risk and Losses

These Internet tools help prevent loss, reduce loss, and
aid in recovery. Large insurer or small broker, you can use these risk containment items
as part of your valued customer service package. Tell your customers about them on your
Web site, and in your e-mail newsletter.

Then think about the next question….or opportunity? Are
your customer’s software intellectual assets, those spreadsheets and documents, even insured?

Wish you happy “value adding”…Have a good summer….And don’t lose your laptop!!