Digitalisation is taking over every aspect of public and private life. Computerisation and networking is continuing to expand in production, transport, science, government and the home. This is creating great opportunities: processes are becoming infinitely reproducible, exacter, safer and more cost-effective overall. And some possibilities for innovation are being created altogether. Digitalisation is therefore revolutionising our lives.
The IoT is allowing more and more applications and devices to connect on-line. We have long since begun communicating not just with each other, but with machines. And the machines are also increasingly communicating together and with us. This phenomenon can be seen in the development of intelligent transportation systems and networked vehicles. Yet digitalisation is also creating new risks and challenges, along with its many advantages. Smart devices, PCs and networked home appliances are increasingly becoming targets for hackers. Networked production facilities, vehicles, transport infrastructure, and all other devices connected to the internet offer opportunities to criminals as well. And our digitised infrastructure is not just increasingly susceptible to hacks and manipulation, but its greater complexity is also increasing the likelihood of failures and interruptions.
Digitalisation is the key to a successful future for the insurance industry. Capital alone is no longer enough. In order to meet the changing needs of its client base, the insurance industry has to invest in hardware and technology such as the IoT and data analytics. The experimental approach being used in tech-hubs such as Silicon Valley, London, Berlin, Peking and Israel, offers an advantage in dealing with digitalisation. This approach has the possibility to turn the industry on its head. Munich Re has deployed innovation scouts and has its own labs in all of these hotspots, where it is at the leading edge in developing innovative solutions together with its clients and other start-ups.
In the end, digitalisation will open up a broad spectrum of new and better applications and facilities. It will increase effectiveness and efficiency in production, create new technologies for private users and businesses, and revolutionise practically every aspect of our lives.