Smart transducer

Such functionality can be achieved by adding an embedded microcontroller to the classical sensor/actuator, which increases the ability to cope with complexity at a fair price.

Typically, these on-board technologies in smart sensors are used for digital processing, either frequency-to-code or analog-to-digital conversations, interfacing functions and calculations.

Traditionally, insurance companies tried to assess the risk of their clients by looking over their application form, trust their answers and then simply cover it with a monthly premium.

The introduction of smart sensors in the insurance industry is disrupting the traditional practice in multiple ways.

Smart sensors generate a large amount of (big) data and affects the business models of insurance companies as follows.

Wearables can for example monitor heart-related metrics, location-based systems like security technologies, or smart thermostats can generate important data of your house.

This approach of trading information in return for special deals is called bartering and it is one form of data monetization.

[10] Data monetization is the act of exchanging information-based products and services for legal tender or something of perceived equivalent value.

One of the recent trends in manufacturing is the revolution of Industry 4.0, in which data exchanging and automation play a crucial role.

[12] For machines to be able to make human decisions, it is imperative to get detailed information, and that’s were smart sensors come in.

For example sensors on objects like vehicles or shipping containers can give detailed information about delivery status.

Nowadays, these sensors only enable some small autonomous features like automatic parking services, obstacle detection and emergency braking, which improves security.

Although a lot of companies are focused on technologies that improve cars and work towards automation, complete disruption of the industry has not yet been reached.

It has to pull physical and environmental data, use that information for calculations, analyze the outcomes and translate it into action.

Established firms have a strong focus on these sustaining innovations, but the risk is that they do not see new entrants coming and have difficulties to adapt.

[13] Therefore, making a distinction between a disruptive and sustaining innovation is important and brings different implications to managers.