Dr. Peter Diamandis is the chairman and CEO of the X Prize Foundation, which creates large incentive prizes intended to drive radical breakthroughs for the benefit of humanity. You’ve likely heard of the $10 million Ansari X Prize for private spaceflight, and perhaps you’ve heard of the $10 million Progressive Automotive X Prize for 100 miles-per-gallon equivalent cars.
His foundation is launching similar prizes in the areas of exploration, life sciences, energy and education. He also counsels many of the world’s top enterprises on utilizing exponential technologies and incentivized innovation to dramatically accelerate business objectives.
Diamandis was one of the keynote speakers at the Insurance Accounting and System Association (IASA) 2013 Educational Conference and Business Show June 2-5 in Washington, D.C. There he told attendees the insurance industry is ripe for disruption. “If you are not disrupting your industry or company, it will be disrupted for you,” Diamandis says.
He brought up a variety of interesting topics. How will driverless cars — which are most definitely on the way — impact auto insurance? He noted how his car today has 100 microprocessors constantly transmitting megabits of data. He predicts that by the end of this decade, people will be wired and dribbling bits of data about their current physical condition. This human equivalent of automobile telematics will someday change the way we monitor our health, and you can bet it will have a huge impact on the life and health insurance markets.
I would say Progressive’s Snapshot has game-changing potential for auto insurance in how it monitors driving activity and can reward its voluntary users with lower auto insurance rates. I can see a day where some life insurance policyholders voluntarily choose to allow their habits — eating, drinking, smoking, exercise, etc. — to be monitored with a Snapshot-like device in an effort to lower the cost of their insurance. It’s really the same concept as the Snapshot. Feeling they have nothing to hide, some healthy-living people will trade a bit of personal privacy for the potential of lower premiums.
This concept would actually probably bother a lot of people less than having their lifestyle habits monitored (with or without them knowing it) via cyberspace. We all know plenty of companies track our online activity, and the more sophisticated entities can compile an enormous amount of information about our lifestyles, interests and purchasing habits without ever having met the person they know so much about.
See also: The data deluge: Can you handle it?
Diamandis notes that computational power is continuously coming on line and being leveraged for data-mining opportunities. “We will have more and more information available on people and lifestyles — when and where they exercise, their social network strength and more,” Diamandis says. “The question becomes how insurers can start to correlate secondary or tertiary data that are becoming available to become more proficient providers.”