insurance is the most profitable connected vehicle service
DESCRIPTION
For telematics service providers, content providers and car manufacturers, Telematics Insurance represents a very stable, long term, profitable business model. Yet Usage Based Insurance is a connected service none of them is in control of- yet. The presentation highlights the benefits and opportunities to work with insurance companies on innovative UBI models.TRANSCRIPT
PTOLEMUS Consulting Group
Insurance: the most profitable connected car service
ConnecteDriver, Brussels,
January 2014 - ©PTOLEMUS - All rights reserved
Source: PTOLEMUS
What is insurance telematics?
• Most current insurance policies use static / statistical criteria to evaluate drivers' risks - Age, gender, vehicle make & age, place of residence, occupation, etc
• Insurance telematics is a policy based on these criteria and 4 new dynamic parameters
Its basic principles
Usage based insurance/ quick definition
The driving risk star
Distance
Static criteria
(statistical)
Time
PlaceDriving behaviour
PTOLEMUS
Insure the box demonstrate the business case for UBI as a connected service
• Since 2010, insure the box provides PHYD insurance to young drivers. Average premium £1600/y
• It has sold around 125,000 policies, entirely online
• It indicates that 95% of its customers get reductions on renewal averaging 34% based on their driving experience
• Its incentives for safe driving have reduced accidents among 17- 21 year olds by 35-40%
3
Usage based insurance business case: claims
PTOLEMUS
Ingenie has created a strong relationship with its customer base
• Twitter campaigns reach of 2 to 3 million
• Campaigns drive web traffic
• Smartphone application feedback every 10 days, after 40 miles driven
• Black messages sent on the same day
• 89% checked their message in the last 14 days
• Average interactions: 6/months
4
Usage based insurance business case: relationship
PTOLEMUS
Sparkassen (S-Direkt) designed its model around Value Added Services
5Source: Unipol, PTOLEMUS
• S-Direkt partnered with local operator Telefonica to provide a service-based offer
• Deutsche Assistance (eCall, bCall)• Masternaut (theft tracking)• Smartphone-based driver feedback is
handled by Telefonica. - Where is my car service- Reduced social interactivity- Best driver contest
• Limited discount to 5%
• 2 Channels: aggregator and direct
• The German market is sensitive to privacy, safety and vehicle theft.
• Telefonica adapted the architecture to separate the driver data and the insurance rating and rescue services.
Usage based insurance business case: VAS
PTOLEMUSPTOLEMUS
The UBI market today
Source: PTOLEMUS 6
The market for telematics insurance is now global
0 1 2 5 10 20 40
US
- AAA
- Allstate
- Am Fam
- Farmers
- GMAC
- Liberty Mutual
- Mapfre
- Progressive
- Safeco
- StateFarm
- The Hartford
- Travelers
- USAA
Canada
- Desjardins
- Industrial Alliance
Mexico
- GNP
EuropeEurope
- Admiral - Ingenie
- Allianz - Insure the box
- Amaline - Linear
- Aurora - Mapfre
- Axa - SparKasse
- Aviva - Reale
- Co-operative - Sara
- Coverbox - The AA
- Direct Line - Unipol
- Generali - Zurich Japon
- AIOI
- Sompo
Afrique du sudAfrique du sud
- Discovery - MiWay
- Hollard - OutSurance
Australie
- AI Insurance
PTOLEMUS Source: PTOLEMUS
Insurance interaction with the driver can take many shapes
7
Possible technologies for vehicle connected services
Insurance telematics market drivers - Technology
Fixed Removable
Line-fitted
Aftermarket
Portable
Black box OBD device
FMS box
OEM system
Semi-embedded system
Self-energised connected modules
Digital tachograph
Drive Cam
Supplier system
Cigarette-lighter device Smartphone
Speed camera locatorPND
Smartwatch
Vehicle keys OEM Smartwatch
PTOLEMUS The video can be seen here: http://youtu.be/YlTFlxI1RuE
Fraud can take many shapes
• UBI technology does not solve everything
8
Insurance telematics market drivers - Technology
PTOLEMUS Source: PTOLEMUS
...Yet very very few are used today
9
Possible technologies for vehicle connected services
Insurance telematics market drivers - Technology
Fixed Removable
Line-fitted
Aftermarket
Portable
Black box OBD device
FMS box
OEM system
Semi-embedded system
Self-energised connected modules
Digital tachograph
Supplier system
Cigarette-lighter device Smartphone
Speed camera locatorPND
Smartwatch
Vehicle keys OEM Smartwatch
Self-energised connected modules
Drive Cam
PTOLEMUS
More service providers are harnessing car data
10
CAN data accessed by the device
Increasing range of services offered
Usage Based Insurance’s use of car data
Source: PTOLEMUS, Progressive, Allianz, Audiovox, Mobile Devices
PTOLEMUS
New services are now offered around the OBD dongle
- eCall- bCall - Fuels saving- Driver scoring and
rewards- Smartphone use
restriction- Driver log- Geofence...
11
CAN data accessed by the device
Increasing range of services offered
- Mileage- Fuel level- RPM- Crash
detection- Alignment
- Airbag- Body
controller- Powertrain- Door control- GPS data- Driving events- VIN
Data include:- Mileage (leasing)- Fuel level- Diagnostic- Crash detection- Fleet tracking
Services include:
Source: PTOLEMUS, Allianz, Audiovox, Mobile Devices
Usage Based Insurance’s use of car data
7
UBI potential for third parties
The car makers can harness UBI to provide added value
• OEMs can become Car Service Providers
- Use eCall as a plateform- Recurring relationship with
customers, meaning increased trust- Numerous new revenue
opportunities
• Insurance can become the number 1 source of connected revenues
- Most of them already sell financing to their customers. Insurance is the next step
- Multiple services can be sold together with UBI, notably bCall, SVR, roadside assistance, etc.
Source: PTOLEMUS
9
Creating a service in partnership with an insurance
• Define the roles and branding:- who is the customer-facing insurance provider- Can multiple insurers offer insurance for a given vehicle
• Define the model or models:- What type of data will be shared? Raw, filtered, score...- How will driver and vehicle data be delivered
• Define the device and technology
- Embedded, customer owned or smartphone?- What sensors can be used accelerometers- Cost and maturity
UBI potential for third parties
23
Conclusion
Insurance has the potential to connect most vehicles
• Telematics is not compulsory, Insurance is
• OBD devices are becoming car data centric service platforms
•Insurers will continue to push for more reliable and efficient accident detection and analysis technologies
•A model of data exchange between various stakeholders will facilitate the take-off of the embedded UBI industry
• UBI will accelerate synergies between connected services and improve usage rate
PTOLEMUS 3
Introduction to the 2013 study
• 800 pages of rigorous analyses of the PAYD / PHYD market based on: - 201 interviews in 18 countries- 330 figures and charts- 3 years of hands-on experience- Our knowledge of the ecosystem
incl. OEMs and TSPs• 38 case studies including Allianz,
Amaguiz, Cobra, Coverbox, Insurethebox, Ingenie, OnStar, Hollard Insurance, Insurethebox, Liberty Mutual, MAIF-MACIF, Norwich Union, Octo Telematics, Progressive, Quindell, State Farm, Unipol, Uniqa, Zurich
• A strategic analysis of the value chain evolution including - The impact of eCall- The role of the smartphone- The new patents and partnerships
• A handbook of 44 suppliers' solutions including our own evaluation and ranking
• 10-year market forecasts - Country forecasts for Canada,
China, France, Germany, India, Italy, Japan, Russia, South Africa, the UK and the US
- Bottom-up estimates of the number of policies for each insurer in the US, the EU and in South Africa
• Telematics insurer market models - Markets’ readiness to UBI for 20
countries- Analyses* of the insurer's business
models in 6 countries• A complete set of
recommendations for insurers, regulators, TSP, OEMs and operators
More than a research report; a real strategic
market analysis
* Italy, the UK, France, Germany, Russia and the US
The UBI Global Study paints a truly comprehensive picture of the UBI market
PTOLEMUS
PTOLEMUS in a nutshell
PTOLEMUS is the first strategy consulting firm focused on telematics and geolocation
16
Mobile content and social networking Application stores, crowd-sourcing, etc.
Navigation & location-based servicesMaps, traffic, fuel prices, speed cameras, parking, etc.
Usage-based charging PAYD / PHYD insurance, Road User Charging,
PAYD car leasing & rental
Telematics & Intelligent Transport SystemsConnected car, tracking, fleet management, eCall, bCall,
Stolen Vehicle Recovery, Car As A Service, connected train, etc.
Positioning / Location enablement
M2M & connectivity
Our fields of expertise
Strategy definition
New market entry Business plan development,
Board coaching and support
Investment Evaluation
Due diligence, Market
assessment, Feasibility studies
Innovation management
Product & services development, Roadmap and
launch management,
Patent strategy
Business development
Partnership strategies,
Response to RFPs, RFQs,
Lobbying
Our consulting services
Procurement strategy
Specification requirements,
Tenders publications,
Supplier negotiation & selection
Implementation
Project & programme
management, Risk analysis &
mitigation strategy
PTOLEMUS
PTOLEMUS in a nutshell
Who we have helped
17
Content & application providers
ITS operators & regulators
Consumer electronics makers
Positioning solution providers
Montezemolo & Partners
Financiers
2012 Directors’ report
(translation from the Italian original which remains the definitive version)
Financial Statements of the Company and the Group at 31 December 2012
27 March 2013
Legal and Administrative Office: 20121 Milan - Foro Buonaparte, 44
Fully paid-up share capital € 314,225,009.80 Tax Code and Milan Company Register no. 00931330583
www.itkgroup.com
Telecom operators
FleetsFleets
Insurers & assistance providers
Telecom infrastructure suppliers
OEMs & telematic vendors
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PTOLEMUS Consulting Group
S t r a t e g i e s f o r M o b i l e C o m p a n i e s
Brussels - Paris - London - Milan - Munich - [email protected]
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