Over the past several weeks, we’ve been looking at how the car of the future—whether you call it the smart car, connected car, driverless car, or cognitive vehicle—will change the way the world drives, and along with it, the traditional business models of the insurance industry.
A study by the University of St. Gallen and ETH (Swiss Federal Institute of Technology in Zurich) examines the state of the 127.5 billion Euro motor insurance market in Europe and its relationship with vehicle manufacturers. The study finds that in-vehicle telematics are a game changer in that relationship, and that automakers, aftermarket parts manufacturers, and insurers all stand to benefit by collaborating on research and in other areas, such as helping to establish standardized solutions for technology and regulation.
Telematics technology enables these provider partners to bundle services together into a “mobility package” which comes with a car purchase. This package can include not only usage-based insurance, but remote vehicle diagnostics, event notification, and other perks.
To tap into this opportunity, the study recommends, insurers have two options: they can directly compete with vehicle manufacturers by developing their own competencies and partnerships in telematics technology, or they can cooperate and integrate their products into vehicle manufacturers’ processes. With outside vendors like Google already developing its own autonomous vehicle, it would seem to make more sense to join them than to beat them.
One example of that philosophy is evidence in how one insurance company—which in the US is practically synonymous with personal lines auto coverage—is preparing for the driver of the future by forging strategic partnerships with automakers and researchers to help produce that vehicle.
In 2012, Ford Motor Co. launched its “Blueprint for Mobility” multi-year plan, which outlines a vision for the progression of automated technologies, smart cars and complete coordinated transportation systems.
Using its Fusion hybrid as a platform, Ford, in collaboration with Insurer State Farm and the University of Michigan, unveiled a self-driving research vehicle in late 2013. The automated sedan is fitted with four LiDAR infrared sensors that can scan the road 2.5 million times per second, drawing a picture of the environment ahead within 200 feet.
Although it’s clear that Ford is the “driver” of the Blueprint for Mobility, State Farm’s involvement in the development of the research Fusion represents a new, progressive approach to a relationship that in the past has been somewhat adversarial.
I would love to hear your opinion on how the car of the future will change the way you do business. Please contact me here with your thoughts and ideas.
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