Back to Smart cities: Mission control

How Smart is the Data?

By Thomas Jenny, Senior Underwriter

City planners have learned a valuable lesson from the real-life anticlimaxes of touted technotopias: data can be fickle. Over-engineered solutions based on fabricated, ideal data fail. Practical urban solutions are based on the real data patterns of city residents, commuters, and businesses. Civil management and development has to be people-centered to be viable in the long run. That is why smart cities use sensors, cameras, and radar to collect data from every possible source.

Even without smart operation centers, cities already possess vast amounts of real data, but 80% of it is unstructured and unprocessed. We need analytics to use it, and governments and partners must be trained to collect and input data and interpret numbers accurately. Bad input or misinterpreted reports could result in a grave mismanagement of finite municipal resources. If systems respond automatically to data, without human review, the results could be disastrous. Faulty utility measurements, not from one building, but from 50,000, could cause chunks of the city to go dry. City planners and builders relying on measurements from defective sensors could get halfway through expensive projects, before realizing calculations were wrong. 

The Risk of Corrupt Analytics

Insurers will have to work closely with technology experts to understand and quantify the risk of malfunctioning devices. Today’s sensors have built-in diagnostics, short-circuit and overheating protection, and electrical and heat isolation to prevent malfunctions from spreading. How well do they work? How many redundancies are in place to compensate for short circuits? How many should be? Rigorous analysis of complex infrastructure projects, including substantial test data, will enable underwriters to quantify risks, and parcel them into manageable portions for coverage.

What about a system crash? Citizens and insurers will need to know that, should the operations center crash, analog solutions are ready. Buildings, roads, utilities, and other services cannot stop working just because the operations center experiences a blackout. People can’t be allowed to be trapped in buildings across the city. Traffic can’t be allowed to come to a standstill. Water and electricity can’t simply shut off. The police can’t sit there waiting for their displays to light up again.


Property and casualty insurers of every description will want to verify that business owners, emergency workers and utility operators are trained to act competently, and have the tools to act, in such a crisis. For example, proving that backup plans are robust and universally understood will be important to successful employee injury claims in a crisis. Business interruption claims will be similar. No business can rely 100% on sensors and IT connections. 

The Crowdsourcing Factor

Direct citizen input, on a real-time basis, will also be invaluable to authorities and engineers, as they allocate resources and plan development. However, like authorities, citizens in a smart city have to be educated to contribute intelligent, useful data.  A smart-city education may well eventually be part of every school curriculum, just as 3D printing is becoming a primary-school standard. Until then, crowd-sourced data can skew analytics, corrupting the integrity and the usefulness of reports.

While a project is still being planned, authorities, businesses, and insurers should collaborate to screen analytics for irregularities resulting from faulty data input, whether from devices or people. Ever hear of Sandra Bullock’s USD 6 million lakeside home deemed uninhabitable shortly after completion? A similar lapse in planning risk analysis could be the undoing of a city budget. 

Even crude data manipulation could wreak havoc. Thieves could bombard social media with fake reports of an accident or crime in one part of the city, diverting police away from the actual burglary. Who would be to blame for such over-reliance on social-media reports? An office building that reads, “In the event of a fire, exit the building before tweeting about it,” may have been suggested by risk engineers. Common-sense backup plans will be critical not only to safety, but also to securing insurance. For smart cities to operate as intended, the integrity of data needs to be both rigorously cultivated, and carefully protected.

What about data connections? Are there risks to all this connectivity?

Click on the following link for next topic:

Smart Cities: Mission Control

Page 1: How Smart is the Data ?

Page 2: The Watchful Eye

Page 3: A new Era of Security for Seniors and Other Vulnerable Groups

Page 4: Cyber Defense for Infrastructure Partners

Page 5: Smart City Risks and Rewards

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