Teamwork will help unlock revenue potential of vehicle data

Growth in global car sales is expected to slow abruptly by 2030, a trend that may be accelerated by growth in autonomous vehicle fleets and other transportation services. But the data that will come from autonomous and connected vehicles have enormous potential value and could offset revenue declines from car sales and insurance.

Currently, the cars occupying today’s roads combined with smartphone use and aftermarket devices offer a wealth of data and insights. For example:

Cars automatically capture data around your driving pace, acceleration, extreme speeding and harsh braking.

Behavioral data are monitored that provide insight into level of driving confidence, length of travel, time of day you’re driving and cellphone use.

Environmental factors are also captured, including road conditions, types of roads you’re driving on and weather.

The vehicles themselves also provide a timeline of important information including vehicle history, equipment, service history and component failures.

While some car owners have telematics integrations built into their vehicle, many use aftermarket devices such as black boxes or plugin devices to provide direct links to their vehicle’s computer and provide similar data. So already, data are being collected and monitored, but the challenge is that they’re all being collected by different devices, so it’s coming to automotive companies and insurers in different forms and metrics, making it inefficient for them to use the data to improve their products, services and customer experience.

As the data collection methods evolve, having a solution that is device-agnostic and adaptable to future technology becomes paramount. Having a platform to ingest and normalize that data coming from OEMs, smartphones and other aftermarket devices would provide data partners with advanced insights that are not only relevant, but also actionable. For example:

Insurers can offer customers flexibility in the data collection source, varying by program, while maintaining continuity in telematics or usage-based insurance programs and receiving comparable scores through a single point of entry requiring no change to existing systems.

Auto manufacturers will gain valuable insights allowing them to provide value-added products with the goal of improving customer experience.

Insurers and automakers can educate consumers on how to reduce their ownership costs through discounted auto insurance.

More than 80 percent of auto industry executives expect data to be a primary revenue source in future business models, according to a recent KPMG report.

Meanwhile, the insurance industry is trying to increase driver adoption of insurance policies based on their vehicle use that give consumers the opportunity to improve their driving behavior. Insurers need data and analytics partners to help aggregate and normalize the data and collaborate with automakers, using the vehicle apps to provide consumers with auto insurance quotes in a matter of minutes and insurers with leads for potential customers.

Given the number of connections between insurers and automakers, this “many to many” challenge requires teamwork. Teamwork allows each industry to harness and exchange data sets with multiple stakeholders to run their businesses more efficiently and substantially improve the customer experience.

As technology continues to evolve, these capabilities will help to further reduce cost, enhance data accuracy and enable drivers to benefit from their driving data. To realize these benefits, data partners must address consumer privacy concerns, leverage experience with consumer data and employ a robust security protocol to both protect this data and provide it to consumers for their needs.

This environment is disruptive but brings opportunities to reach new customers, maximize revenue potential and benefit consumers. Automakers and insurers alike want to know more to better serve consumers throughout the life cycle of vehicle ownership and through life events that change their personal needs. Having data and insight to back that up will allow both sides to cater to those needs and adapt as consumers embrace technology in every aspect of their lives.