Integrating connected cars into insurance supply chains
With more cars rolling off assembly lines with advanced connectivity, discover how these vehicles can fit into current telematics models.
Consumers are showing more interest in auto insurance rates based on their actual driving behaviors, and some insurers have been answering these calls, but as technology advances both inside and outside of vehicles, more companies are expected to leverage advanced telematics.
The improving efficacy of data is leading to a shift from companies and carriers that have historically been leaders in telematics to a wider pool of users across the insurance industry, according to John Chalfant, senior product manager of the U.S. connected car team at LexisNexis Risk Solutions. He notes that as telematics solutions become more accessible, the more they will be embraced across the industry’s supply chain.
As we aren’t to the point where connected cars make up the bulk of vehicles on the road, the system will still need to blend in existing programs that derived data from aftermarket devices and apps.
“Obviously, connected vehicle data is increasing as more roll of assembly lines, but right now there is still a need for aftermarket devices,” he told PropertyCausualty360.com. He notes by leveraging data from both connected vehicle and existing aftermarket programs, insurers can offer telematics to all, and collect data from, all of their insureds.
5G could change the game
Further lifting the potential for connected cars is the growth of 5G and the continued connectivity of the world itself, he said, adding this will allow for the leveraging of additional data sets.
The data collected from connected cars will be familiar to insurance professionals, as it is “very standard,” Chalfant said. However, as the connected car data set continues to grow, the information collected will become richer.
Emerging technology will also improve the picture, such as facial recognition, but the ability to access that stream in real-time because of 5G will be a game-changer, he explained. This will culminate in ever richer data points and more granular information from within the vehicle.
The most important thing when working with clients is ensuring these new data streams demonstrate a value beyond what they are currently using, he noted.
“Carriers want to see the proof, and what we are seeing from the market is they are finding value in the improved predictiveness of this data,” Chalfant said. “The market understands the value of how this really improves insights in driving behavior, not as a proxy set, but a true driving data set.”
While Chalfant is focused on quoting and underwriting, he said connected cars and their data can offer opportunities for advancement across the insurance spectrum.
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