In the world of risk, to ignore the future is to welcome thepast.

One future that is becoming increasingly clear is a world drivenby the rise of the Internet of Things (IoT) and big data, whererisk is instantaneously aggregated, measured, predicted,interpreted and transacted through a steady stream of informationsources transmitting information without computer interaction. Thattechnological development offers new possibilities for risk dataaggregation and interpretation and presents new risk and securitychallenges.

One particular IoT opportunity JLT Group sees concerns theretail broking industry, specifically. At its core, theproliferation and accessibility of information made possible by therise of IoT creates a foundation to reset the retail insurancebroking industry. These technologies have the potential to redefinethe speed and frequency of how insurable risk is assessed, pricedand sold.

Let's consider a few examples from an IoT future world.

First, Auto insurance will be transformed from a world of annualpolicy terms that in essence "mark up the cost of accidents" toinsurance offers and transactions that are made in real-time todrivers based on instantaneous data coming from geolocation,weather and traffic patterns, vehicle informatics and driverexperience. If a snowstorm is moving through Chicago at rush hour,the insurance rate would be much higher than a sunny weekend day inLA. The variable price of risk can be determined at a micro level,and the buying decisions will dictate if they are willing to assumethe risk.

Read related: How the Internet of Things is changing insurance

Weather risk

Another example is catastrophic weather-related risk. With thecontinued advancement in meteorology and real-time monitoring, thenear future could see a spot market develop around catastrophicrisk during an actual event. A company could use excess insurancemarkets to buy more insurance or buy an option for additionallimits during a developing situation. The data available throughIoT can define pricing in real time as the storm and correspondingrisk develops. This will change how capital is deployed and alsotransform the role of risk management during crisis situations intoa model more akin to currency hedges and derivativetrading. 

Already today, JLT Group's flood mapping is advancing big dataand IoT through a flood model that aggregates government data fromthe past 40 years and combines with various external data sourcesto better model and predict flood risk on a property-by-propertybasis. This allows owners and insurance companies to identify therisk at each individual property and price the insuranceaccordingly.

This level of detail fundamentally shifts how companies assessrisk and buy Flood insurance. Furthermore, this insight becomespart of the operational models of companies further refining theirstrategic decisions and investments.

The proliferation of wearable and personal technology, and thecorresponding data and information, reflects yet another rapidlydeveloping area of IoT. For instance, one of the primary challengesfor risk management and mitigation is the definition of "Who orwhat is where?"

During a crisis, it is critical that the people and assets areidentified and protected. Many companies have made considerableadvancement in this area. For example, MOBSS has created technologythat provides identity persistence and validation across anysetting. This open up a world where companies can track theirpeople and assets in real time, and using analytics, betterunderstand the implications to improve operations. 

Global stage

Another area of transformational change is with risk arisingfrom international activities and IoT. In the technology-connectedworld, sovereignty and borders matter far less than before. Thesmallest company can compete and operate on the same level as thelargest companies across the globe. IoT and big data begin toredefine the rules of trade and the underlying rules of risk. Theability to now view the entire system from a data perspectiverequires retail brokers to change their aperture and move beyond aworld of localized risk to an interconnected world where eachelement is related and can have an affect on the entire system.

Read related: Technology and insurance predictions for 2016

For instance, the smallest of supply chain interruptions canhave ripple effects across an entire ecosystem, compounding aseemingly small issue into a problem that affects business income.Additionally, products' use of component parts opens up new risk,as they can become the access points for hackers and cybercriminals. Finally, the speed of political change is known almostimmediately. Companies who can understand how this informationaffects the system will better respond and mitigate their risk. Theinterconnected world that clients operate requires the broker tomirror and have the same capabilities and reach. 

Ending where we started, with the increasing expectations ofcustomers, technology and information drive a new standard ofpossibilities for retail insurance brokers. Clients see thepotential and demand that the broker understand the tools andcapabilities of what technology can provide and also requirediscussions that intertwine technology with the insurance brokingand management process.

The future of retail broking requires companies to understandand harness the power of data in real time to increase theefficiency of transactions, the relevance of product and clientsatisfaction.

Douglas Turk is the chief marketing officer for London-basedinsurer JLT Group.