First, there is a direct implication for any insurer that is using the Internet of Things as part of any insurance product: for example, connected homes, connected cars, connected commercial property, even wearable devices for injured workers that are in rehabilitation programs. The reliability of the data going to insurers could be compromised. The whole point of the Internet of Things for insurers is to get new kinds of data that let them be smarter in terms of how they’re pricing, underwriting and adjusting claims. This vulnerability potentially undermines the basic value proposition of the Internet of Things for insurers.
There is something even more ominous. Bad actors could wreak havoc by taking over basic functionality within a car’s steering system or braking system. That could cause individual accidents or a lot of accidents. It could cause a lot of losses that were not anticipated. The nightmare scenario is the cyber warfare dimension. It’s not an insurance issue, but you could have a state actor or terrorist organization that wants to wage cyber warfare on societal infrastructure, power grids, water supply systems.