the connected car - ibis...

The connected carSean Carey, president, SCG Management Consultants

IBIS predictions • The connected car will change the claims and repair landscape forever• The component parts are there…But no one has put them together• New entrants will change the landscape• Claims still remains the red headed stepchild of the connected car• The new entrants are with us….Verisk, Apple, Google, OCTO• The pace of change has increased….technology compresses time• It’s not full autonomous it’s the journey…ADAS, mobility,

car share/hail….rapid change

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Four years ago I presented at IBIS in Barcelona on a topic titled

Connected Car Connected Claim

It’s fair to say I was ‘out on a limb’, a little bit ‘out there’

Today the OEM and claims industry is consumed with talk about…

Connected Cars & Connected Claims

Why would the United Arab Emirates be interested…

It’s a global phenomenon

The connected car landscape

The connected car is connected to everything

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The connected car marketSignificant and rapid growth – 45% CAGR

MM Units

BI Intelligence, 2015.

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5 7 1525 30

55

85

2128

33

50

70

95

135

2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0

Active User Connected Car

MM Units

Technology Compresses Time

2017 2020

Technology Compresses Time

2017 2020

Technology compresses time

Advanced Driver Assistance Systems (ADAS)• Adaptive cruise control (ACC)

• Adaptive high beam

• Glare-free high beam and pixel light

• Adaptive light control: swivelling curve lights

• Automatic parking

• Automotive navigation system with typically GPS and TMC for providing up-to-date traffic information.

• Automotive night vision

• Blind spot monitor

• Collision avoidance system(Precrash system)

• Crosswind stabilization

• Cruise control

• Driver drowsiness detection

• Driver Monitoring System

• Electric vehicle warning sounds used in hybrids and plug-in electric vehicles

• Emergency driver assistant

• Forward Collision Warning

• Intersection assistant

• Hill descent control

• Intelligent speed adaptation or intelligent speed advice (ISA)

• Lane departure warning system

• Lane change assistance

• Parking sensor

• Pedestrian protection system

• Rain sensor

• Surround View system

• Traffic sign recognition

• Turning assistant

• Vehicular communication systems

• Wrong-way driving warning

What do the academics think?

Accident rate impact

80% Decline by 2040

29% Decline by 2020

29% Increase

2.5X Increase

Accident rate impact

The connected carFocused on safety, user-experience and data

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Source: KMPG Self Driving Cars – Automobile Insurance in the Era of Autonomous Vehicles

Source: KMPG Self Driving Cars – Automobile Insurance in the Era of Autonomous Vehicles

The connected car

Telematics Driving Data

Open Exchange

UBI, Other

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The early buds of MayToyota launches a new, US-based company combining telematics and insurance

Effects on workflow…It’s all about the consumer

Market – prevailing conditions

The claims/collision market is highly fragmented and somewhat dysfunctional

The insurers dominate the landscape & The MSO segment has grown to become a significant barometer of the industry

These dominant entities are forging ‘relationships’ that further accelerates the consolidation dynamic

The independent repair community is adrift & the Consumer is getting lost in all of this

Vehicle technology requires different repair methods and procedures creating a technical tsunami & there is a technology tsunami following closely behind

The OEMs are responding to market forces (its now about brand reputation)

Telematics and the connected car will change the market forever

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So what if?

What if the car made the claim?

Constant Updated

Communications

Source images for illustrative purposes only

DATA CENTERS

Insurance

Claim

Emergency

Dispatch

Analytics

Performance

based

Assignments

Scorecards

Scheduling

Damage

Assessment &

Parts List

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Connected car gives OEMs FNOL

Accident Call Insurer

Shop Located

Est.Sched.

Est.Compl.

RepairSched.

RepairCompl.

Car Delivered

Current InsurerDRP Process

CSI

Quality-focused, dealer

supported shop using

OEM Procedures,

OEM parts - $140MM

per point, retention marketing opportunities (1% total loss) - ~$1bil

Retention -~$60 Bil,

unperformed aftercare @ dealership(Referrals)

X

Telematics-based

FNOL

Predictive

estimate directly

to shop

Certified shops retention & resale

opportunities realized –1% new car sale retention ~$5bil

X X X

Claims Efficiency – Improved Cycle time Reduced Cost – Happier Customers

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It’s not just about parts… It’s much bigger• Consumer Awareness - The market has been losing sight of the consumer and yet the consumer

is the lifeblood for OEM’s. 1% of market is worth $5 billion

• Consumer Sentiment – OEM’s can no longer put their brand at risk to shabby claims and repair experiences…what if it goes viral…and it does go viral

• Retention – Getting vehicle brand owners back into vehicle brand is critical, consumers change brands 40% of the time if their car is totaled. This is a multi billion dollar opportunity (based on US news and BB&T data).

In addition, Chrysler senior execs say if there is an issue with an accident repair, 60% of those vehicles will be sold or

traded within a year. 63% will be replaced with a different brand

• Telematics – Will change the workflow and power status of this industry forever the CONNECTED CAR has already started the journey

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OEMs return to the market

All Assets Deployed

Parts Programs

New stakeholders see bigger picture and deploy all the OEM Assets to secure the future of the business

OEM’s will bring more effective parts programs

to market such as MPL sun setting the parts

battle and challenging the Insurer dominance

OEM Stakeholders

Industry Support

As brand reputation is at risk the OEM stakeholders become Parts group & Sales/Brand group

OEM’s will provide much needed industry support

in terms of technical, technology and resource

A Whole new World

Consumer NetworksOEM Networks emerge

that compete with Insurers for customer

mind share as the OEM’s target and focus on

consumer

With the old battle lines blurred the OEM’s from a position of necessity and desire create new paradigms in the space where anything is possible

PartnershipsThe OEM’s establish partnerships

with industry constituents

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OEMs’MarketReturn

Why would the United Arab Emirates be interested?

It’s a global phenomenon

You can’t compare markets

Too diverse to standardize

But will not take 30 years. Certain markets will simply leapfrog

Too varied in their stages of development and infrastructure

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You have to follow the car… excuse the pun

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OEM Advanced Materials

ADAS Autonomous Market Trial

Fully Autonomous

X X X X

X X X 2021

X Waymo X

X X X 2021

X X X X

X X Waymo 2020

X 2022

X X X X

X MIT/Stanford 2020

X X 2018

X Stanford

X X X X

X X 2017 2022

X X X X

X X

All the major OEMs are deep into

development and testing

Fuel Economy 10%+Driver fatigueDriver ResourcesReduced Accidents ~45%More efficient payloads

Complex but inevitableGovernments supportiveBeing fast tracked Early adopters will benefit greatly

By 2020 we will have entered a new Socio Economic CycleWe’ll shift from ‘what’s in it for me’ to ‘what’s in it for us’More social conscience More environmental concernGreater value on well being over wealth

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Trucks will lead the way

Legislation will be complex but expedited

Socio economic demands a better system

94% of crashes = Human Error1.25 Million RTA deaths annuallyInsurance costs are set to explodeYet Insurance models are set to change beyond recognitionThe Environment can’t sustain the smogAutonomous/connected or otherwise the road ahead is very different

The human cost of vehicle transport today is not sustainable

Campus transport not far behind

Car share and car hail will grow rapidly

No matter what… the road ahead is changing

Trust me, insurers are preparing for this future landscape and have specialist teams working hard to figure it out

OEMs are at the forefront of creating this future and it’s making it’s way into the claims/repair segment

If you’re not preparing for a different supply chain model… you should be. How close are you to the vehicle?

Repairers should be planning for a future whereby there are less repairs, coming from a different source, requiring higher and different skill levels and using different procedures, equipment and technology than today.

So how do you prepare?

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Thank you