Honeywell creates new division for industrial IoT data and analytics (HON)

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Honeywell is taking a big step forward into the IoT space.

The conglomerate has created a new "Digital Transformation" division that will help industrial enterprise clients manage and analyze data from their IoT devices and systems, according to Automation World.

Honeywell already offers Internet of Things devices and automation systems for companies in industrial sectors such as manufacturing and oil and gas. But this new division should help these same companies deal with the extreme amount of data that these devices can generate by analyzing it to highlight the most important information that would ultimately help manufacturers improve their bottom lines.

Automation World quoted a Honeywell executive who said that industrial sectors are currently producing 2.5 billion gigabytes of data every day from IoT devices and systems. As staggering as that is, that same executive said that number would quadruple in the next five years thanks to increasing IoT adoption.

This gargantuan data output requires analysis that can help companies reduce downtime on their production operations, boost productivity, and improve safety conditions for workers.

Honeywell's new division will also create a system that will scan connected industrial environments for cybersecurity threats and handle responses to those threats. This is crucial because industrial companies often have fewer resources to spend on cybersecurity than other industries, such as financial services.

But as industrial companies increasingly adopt IoT devices, they will undoubtedly look for cybersecurity solutions to thwart hackers.

In the last year, the number of records exposed in data breaches rose 97%, according to the Identity Theft Resource Center.

The frequency and sophistication of cyber attacks are at an all-time high, and the costs associated with data breaches continue to rise. While companies are investing more in cybersecurity to ward off attacks, they know they won’t be able to spend their way to absolute security. A cybersecurity team of more than 1,000 staffers with a budget of $250 million wasn’t enough to save JPMorgan Chase from getting hacked in 2014. As a result, companies are turning to cyber insurance to help mitigate the costs of a potential breach.

However, insurers have been slow to extend cyber insurance to many businesses, as they have yet to develop proven tools to help them assess the risks and costs associated with cyber attacks. Cyber insurance policies also often have high premiums and low coverage limits to help protect insurers from incurring too much exposure to a cyber attack.

Jonathan Camhi, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on cyber insurance that examines the growth of this market and identifies the key factors driving that growth. It also identifies the commercial sectors that are underserved in the cyber insurance market, which present a unique opportunity to insurers. Finally, it explains how insurers can find creative ways to cover these underserved markets while still limiting their overall exposure.

Honeywell creates new division for industrial IoT data and analytics

Here are some key takeaways from the report:

• Cyber insurance plans cover a variety of costs related to cyber attacks, including revenue lost from downtime, notifying customers impacted by a data breach, and providing identity theft protection for such customers.
• Annual cyber insurance premiums will more than double over the next four years, growing from to ~$8 billion in 2020.
• However, many insurance companies have been hesitant to offer cyber insurance because of the high frequency of cyber attacks and their steep costs. For example, Target’s notorious data breach cost the company more than $260 million.
• Insurers also don’t have enough historical data about cyber attacks to help them fully understand their risks and exposures.
• There are large underserved markets with very low cyber insurance adoption rates such as the manufacturing sector, where less than 5% of businesses have cyber insurance coverage.

In full, the report:

• Projects the growing demand and premiums for cyber insurance in comparison to other common forms of commercial insurance.
• Illustrates how cyber attacks are growing more sophisticated and more costly, which is driving more companies to consider cyber insurance.
• Explains the obstacles that insurers face in extending cyber insurance coverage to different types of businesses.
• Provides insights on how insurers can overcome these challenges to grow their cyber insurance business without incurring too much risk.

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