The Internet of Things (IoT) - a term with which we are becoming increasingly familiar - refers to the interconnection of computing devices and sensors embedded into everyday objects. These objects include devices, vehicles, machines and even smart home appliances that constantly collect and exchange data via the Internet.
Christelle Colman, Managing Director of Elite Risk Acceptances – a subsidiary of Old Mutual Insure says, “While this technology has the potential to greatly increase convenience in everyday life, IoT enabled appliances can also betray their owners presenting new insurance challenges.”
First generation IoT objects are very much a part of everyday life and the risk landscape is already changing as a result. These potential risks are especially relevant to the high-net-worth (HNW) market, since these individuals are generally known for being early adopters of high tech appliances and wearables that can connect to smart devices and online resources. Additionally, HNW individuals often install high-tech security measures – that can be monitored remotely – in their luxury homes.
As IoT becomes more widespread, the potential for cyberattacks increases significantly. According to cybersecurity firm, Kaspersky, attacks on IoT devices increased threefold in the first half of 2018 alone. This is because the security on most IoT devices is still considered to be relatively weak in the face of ever-evolving cyber risks.
Ransomware attackers now have one more medium to extort money from victims, with attackers taking to disabling a connected device at crucial moments when they cannot be reset or disconnected. For example, a ransomware attack could shut down a home’s air-conditioning or security system while the owners are away on holiday, until a ransom is paid.