Interesting post. I certainly see your point that if you can accurately predict the risk then there is no need for insurance. I would argue however the days that information becomes so accurate that insurance is unnecessary remain far in the future. Further, a major component of insurance is protection from catastrophes which are not necessarily predictable. Thus, people will continue to want to protect themselves from the financial risk of extreme weather, accidents, and other forms of personal catastrophes.
An interesting area to consider how insurance companies will use big data in the near future is in the healthcare sector. Due to growing costs, many hospital systems and insurers are experimenting with new payment models such as captitated payment models in which an insurer provides a hospital system with a lump sum of money to provide care to a defined number of patients. Where big data comes in is in predicting how much the population of patients will cost. A major weakness in the current payment model is the difficulty in accurately risk adjusting between hospital populations. If insurers are able to more accurately risk adjust based on patient data, they will be more accurate in predicting the amount of funding needed to care for that population.
Wow. Great post. Crazy to think that driver-less trucks are within grasp of modern technology. I’m curious if the plan for the future is to continue to have a cautionary driver behind the wheel in case things “go wrong.” Without a driver behind the wheel it will be difficult to determine liability when mistakes are made. That being said, having a backup driver behind the wheel continues to limit what the technology can do as I imagine there will be similar regulation of the amount of time the driver can operate each week. There is likely a fairly intense conflict within Otto to both innovate and move forward quickly to be first movers but also to be conservative and ensure there are no accidents early on. Public perception will be very important for this company and operation model to be successful.
Great article. I am really excited regarding mPharma’s business and operations model for two key reasons. The first is that it works to directly involve the pharmacist in the patient care pathway by providing a line of communication between the patient and the pharmacist. Involving the pharmacist is key as studies have indicated that medication adherence goes up and medication errors go down when the pharmacist is directly involved. The other thing mPharma does is provide patients with HIV/AIDs with a private line to access HAART and advice. In many parts of Africa there continues to be a stigma associated with HIV which prevents patients from seeking care. By providing these patients with a more private method for getting access to the drugs they need mPharma may play a primary role in getting HAART to the patients that require it.
Great post. The internet of things will undoubtedly continue to revolutionize the way we interact with technology and with each other. I’m curious as a semi-conductor company how secure Skyworks Solutions is in holding their marketshare. Semi-conductors seem like a commodity product and thus open to any competitor that can produce them for cheaper. Given this I definitely agree with your plan to diversify and to innovate in capitalizing on their knowledge of the internet of things. It will be exciting to see what kind of products Skyworks Solutions comes up with in the coming years.
I have been obsessed with iRobot since they released the original Roomba. I agree with your thesis that iRobot will need to innovate new features for the Roomba in order to stay relevant. I’m curious however if this will be new features on the actual Roomba or if it means introducing complimentary products. Nest has been gaining a lot of ground in introducing “smart-home” products at a reasonable price. I wonder if the move for iRobot will be to introduce products which compete with the Nest products but with the kicker that the products will integrate with the Roomba as well. As you mentioned however, in order for them to compete in this space their entry price point will need to drop considerably.
Awesome post! I find your post-apocalyptic no chocolate vision to be absolutely terrifying. I’m curious if the cocoa industry has looked into moving production indoors and investing in vertical farms. I have very limited knowledge of how to grow cocoa however I believe it requires a fairly specific climate to be successful. Invest now in sustainable indoor vertical farms would allow companies such as Nestle to take much of the risk out of leaning on chocolate sales moving forward. The major downside to this plan would be the huge upfront cost of producing the facilities when the future of climate change is uncertain. Vertical farms also tend to require far fewer workers which may negatively impact the economy of these emerging markets.
Climate change presents challenges for farmers and rancher all over the globe however you have presented an interesting insight into the market in Denmark. One aspect of your argument I’d like to push back on is the idea that Danish farmers should consider out-sourcing their herd to an emerging market where environmental regulations are less severe. While I agree this would make sense from a short term financial point of view, it does not address the root problem which is current livestock practices are unsustainable. It is also likely not sustainable from a long term point of view as environmental restrictions will eventually make their way to emerging markets as well. I would also argue that the government of Denmark would likely apply a tax to any meat imported from emerging markets and if the general public learned the herd was moved to skirt environmental responsibilities there would be a negative impact on demand.
In my opinion the key to you solution is your final point that livestock businesses must invest in new technologies that work to mitigate the huge amounts of emissions produced in their industry. Only through this will the livestock industry actually make moves towards becoming a sustainable industry. Given that climate change will directly impact their ability to operate in the future (less water means less crops, warmer temperatures result in increased susceptibility of livestock to disease) I believe the livestock industry must invest now to mitigate the negative impact they are having on the environment.
This was a great read. Until now I had never really considered the Catch-22 of how making one operation more sustainable may require increasing the emissions from another operation. I also agree with Garet’s comment that the oversight of what inputs go into producing sustainable products or renewable energy machinery is a cornerstone for the demonization of mining industry. I wonder though if in many ways this is a necessary oversight. Climate change has proven to be a controversial topic over the past number of decades. Only recently with new insights thanks to research have we as a society begun to take climate change seriously. As with any good marketing campaign you want to make your message as clear and simplistic as possible. Accounting for the waste and emissions that are produced in producing sustainable machinery may be too complex of a task for the general public. In this light I think it makes sense that the general public sees cooper mining as all bad and Tesla as all good given they do not see the connection between the two.
Very interesting piece!
A major concern with climate change is the potential for an increase in the incidence and severity of major storm events such as hurricanes and tornadoes. As a medical community the response to these events is often variable and depends on the local healthcare systems resources and ability to mobilize those resources. You mentioned that the local hospital communities in Katrina and Sandy were unable to provide the care needed for potential patients during the storm. If we are facing a world in which these storms are occurring more frequently, we cannot accept the outcomes in Sandy and Katrina. In response to this need, the healthcare community has founded seventeen disaster medicine fellowships to train emergency medicine residents in disaster medicine. MGH and the Harvard Emergency Medicine Residency program offers this fellowship. The fellowships consist of a one-year curriculum which aims to educate the fellows on how to produce an action plan for extreme scenarios such as a severe storm and how to work with a network of hospitals to put the plan into action. Action plans would consist of organizing the resources of the Center for Disease Control, Department Health and Human Services, Mediflight services, and local hospitals to make a coordinated response to disaster. With programs such as these producing experts in disaster health, the hope is that we can as a healthcare community continue to offer care to every patient during the severe weather events.
Great topic and insights into the challenges of P&C insurers as the weather becomes more severe and the risk profile of their contracts changes. An additional issue for insurers like Allstate who have put a huge emphasis on becoming THE company for auto insurance is that ride sharing is disrupting the way people get around. My mother is an Allstate agent, and recent developments with ride sharing and investment in public transit systems has led them to pivot away from emphasizing auto insurance sells and start focusing more on home and life insurance. While I agree with you that an increase in the incidence of severe storms will affect the number of claims each year, I believe if Allstate is aggressive in building their book of business they will still be able to diversify away that risk.
I am also curious about Allstate’s role in investing in sustainability projects. I’m fairly skeptical that any program they pursue would serve any purpose other than goodwill marketing. The return on investment for these program would fairly minimal otherwise as as they can’t expect to make serious changes on the future of climate change.