Making IoT Data Actionable Using Predictive Analytics

Editor's Notes

• #3: Devices in the Internet of Things communicate with each other, only a human isn’t directly prompting the interaction. Today we call this “The Internet of Things,” but that’s only because it’s new. In five years we’ll probably just call it “the internet.”
• #4: Gartner put the number of IoT devices at 8 billion in 2017. For 2020, they estimate TWENTY billion. Cisco estimates 50 billion. We can be sure they’re both wrong, but one of them might be close. The point is, there will be tens of billions of devices generating data. And on the data side, what’s interesting is that humans have generated the majority of the data out there today, from pictures and texts, to movies, to scholarly articles. But soon the data created by “things” will dwarf the data created by humans.
• #5: There has been a lot of activity over the past year but these same key questions are still largely unanswered. [Walk through points] And I’ll add one more --- Consumer engagement. What gets the consumer to push through setup challenges, encourage them to replace batteries, or even engage with the device through an app? There is still a lot of ambivalence and complexity out there so instead of taking a step back like we did last year, let’s take a step in and look at some specific use cases. Who will be the winners and loser in the devices and platforms. There will continue to be consolidation, new entries and exits. This makes partnerships and data agreements complicated. Who is driving? Is it the Consumer, the insurer or the infrastructure. As I showed on the previous slide… You may want to prevent water losses, but that doesn’t mean your policyholder shares that concern. He or she may be more likely to opt for voice activated mood lighting. Discounts or carrier device buys may help to remedy this over time. Connected utility meters, built in capabilities may influence in time. Cyber risk: In 2016 there was a major Distributed Denial of Service attack that shut down a number of websites. Wifi enable baby monitors have been hacked. Carriers do have to consider this when potentially connected their brand with a device. Do you want that connected thermostat you encouraged your customer to buy to be susceptible to ransomware that extort a payment to keep the heat on during the winter? .. . The good news is that there are good companies out there today working on building more sophisticated technology to protect connected devices. Much of the purported benefit of the connected home is speculation. How does this data really play out? Does the connected water sensor really prevent loss payments to a significant degree. Does it reduce frequency? Just Severity? How much? We need a lot more data to know for sure. And multiply that across the dozens of devices that are available. How big is the disruption? If at the end of the day we end up with a lot of new data sources that allow us to offer another 5% discount, or that help us validate the home security system discounts carriers are already giving . . . Then it’s still useful but not revolutionary. On the other hand, being able to price a risk from the ground-up using a multitude of IoT real time data becomes a reality then maybe it does. The other question here is loss mitigation versus loss avoidance. Finally, is cost. Particularly the cost of the device. As we discussed above, the consumer may not buy the devices you want them to have, which means the insurer would potentially need to foot the bill (either directly or through discounting and/or rate). That math needs to work, and a $5 device will be a lot more attractive to mitigate flood risk under a give sink then an $80 device.
• #9: Insurers can explore many ways to avoid and limit losses So where does LexisNexis fit in the IoT world? We can analyze, normalize, and score this data for our customers (WITH THE CONSUMERS PERMISSION, OF COURSE). We can solve the many to many challenge, not only for insurers, but for IoT companies, too. We can take millions of datapoints and turn them into something digestible and meaningful to the industry. I hope this all sounds familiar, because it’s what we do every day already. And the normalization can take many forms. It’s not hard to imagine that the Nest, the Ecobee, the Lyric, and the Sensi - all smart thermostats which use occupancy to make decisions – might produce different data. It might come at different intervals, at different levels of granularity, and there may be differences in sensitivity between them. Clearly there’s an opportunity for us to normalize that data on the way in so that we can produce occupancy score or attribute from thermostats that works for ALL popular models of thermostat. This is not too different from what we’ve done in the UBI space to normalize driver scores across phone types.
• #11: This is one piece of the data that we can collect from Nest thermostats. In this case I once again got one of my co-workers to agree to let me use his data – but he won’t let me use his real name because he is paranoid that his rates will go up. We are going to call him “Shawn” Shawn has two Nest thermostats and they each send data nearly 150 times a day. This data stream has dozens of field including everything from the actual temperature in the home, the desired temperature, the location of the thermostat the consumer has specified and whether someone has locked in a temperature other than those in the settings. The nest thermostat switches to “Eco” mode when it doesn’t detect anyone present in the home and this data is captured as well.
• #12: Here is Shawn’s lake House. Only one thermostat in this house but it is consistently reporting “Eco Status” until we get to the Holiday weekend. Now this is a very clear example and not every example will be this clear but it is evident.
• #15: Assignment of Benefits mainly impacts water non-weather claims associated with leaking pipes and damaged appliances
• #20: Small circles are tweets containing ‘tornado’, large circles are official sightings So we are starting to harvest based on keywords to 1: build up data to have a baseline  (i.e. background noise) 2: ‘hoping’ for an event to see spikes   Right now we are grabbing tweets with words (also partial) containing the keywords Flood Hail Lightning Tornado Wildfire
• #22: So where does LexisNexis fit in the IoT world? We can analyze, normalize, and score this data for our customers (WITH THE CONSUMERS PERMISSION, OF COURSE). We can solve the many to many challenge, not only for insurers, but for IoT companies, too. We can take millions of datapoints and turn them into something digestible and meaningful to the industry. I hope this all sounds familiar, because it’s what we do every day already. And the normalization can take many forms. It’s not hard to imagine that the Nest, the Ecobee, the Lyric, and the Sensi - all smart thermostats which use occupancy to make decisions – might produce different data. It might come at different intervals, at different levels of granularity, and there may be differences in sensitivity between them. Clearly there’s an opportunity for us to normalize that data on the way in so that we can produce occupancy score or attribute from thermostats that works for ALL popular models of thermostat. This is not too different from what we’ve done in the UBI space to normalize driver scores across phone types.
• #23: For a carrier that wants to get started in IoT the first objective is to get data, and this can be a challenge by yourself. However, LexisNexis offers to be your partner in collecting and interpreting this data. An easy place to start is by leveraging the devices that are already in your customer’s homes.   LexisNexis is in the process of rolling out internal pilots with our employees to collect Nest thermostat data via an API connection. As we move into phase II of this program by early next year, we invite you to join us. For your customers that opt in, and have a Nest in their home, you will be able to simply supply them with a URL to begin collecting data.   LexisNexis will then collect and process data, including pooling with participants should you choose to participate in data sharing and share the aggregate results with the broader group.   If you are interested in a water device pilot, we are happy to work with you as well and are happy to facilitate conversations with device makers that fit your needs.