Harnessing the power of connected data to create differentiating and engaging connected car insurance propositions
In the fast-changing world of mobility, the Floow supports insurers with mobile experiences and predictive analytics that increase customer engagement and safety. We sat down with Aldo Monteforte, CEO and Founder of The Floow, to hear more about how to create better insurance products using OEM data, fundamentally changing the way insurance is priced and consumed, using connected technology.
Aldo, you founded The Floow a little over a decade ago; can you tell us a bit more about your vision and where The Floow is now?
I started The Floow a decade ago with a very simple vision: everything we do is inspired by the ambition to make mobility safer. Over the years we’ve built a portfolio of insurance partners spanning the world: some of the largest global insurance organisations from Direct Line, Aviva in Europe, Progressive in the US and many others, entrust the Floow as their custodian of mobility data. We act as their trusted collector and refiner of mobility data in support of their connected insurance products.
And in April we took an important next step: the merger with Nasdaq listed Otonomo. The objective of this transaction was very simple: to enable our partners to access connected car data and extend the Floow agnostic refinery from smartphones and third-party aftermarket devices that we pioneered since 2012, to the tsunami of connected car data that is in existence out there.
A tsunami of connected car data – that sounds overwhelming. What do you see as some of the main challenges with connected car data, and how to resolve them?
With the advent of connected car data, the importance of having a capable platform that can ingest and process significant datasets is even more meaningful. This is because complexity abounds, each OEM has their own data silos. Data formats and dictionaries are different from vehicle maker to vehicle maker. The volumes are enormous. And of course, needless to say, we need to be extremely compliant with data privacy regulation and operate as directed by each regulatory framework in every different jurisdiction.
But solving this problem delivers a holy grail of data sets. These are just some examples of data that can be collected from vehicles: think of tire pressure, tire friction, number of people sitting in the car thanks to the seatbelt tensioning information set, weather data coming from the car and you name it. Many of these data sets have significant insurance value. And now we fuse this data with data coming from smartphones, in what we call Floow Fusion. Some amazing data that informs us about distraction, which is the most powerful predictor of claim propensity, with data coming from the equipment natively built on board by the OEMs themselves. We transform this fusion of data into insights that carry predictive actuarial lift for our insurance partners. It enables visionary insurance leaders to develop next generation products that delight and surprise end-users.
How do drivers view connected car insurance?
We performed a survey at the Floow, across the UK, Germany and the US to look into this. We found that 81% of drivers believe that insurance should be priced based on how individuals drive. The findings fundamentally point to the fact that the consumer market is maturing and is ready to embrace connected products. And on the manufacturer side: 100% of cars coming into the market in Europe, and about 90 to 95% in the US are already connected at origin.
So, in a nutshell, we are crafting a next generation of connected products that surprise and engage end-users through connection with both devices, that are most important in somebody’s life, the car and the smartphone.
What are some of the benefits for end-users?
End-users benefit from the access to safety features, the notion that we know, that in 100% of the cases when the airbag deploys, it means we can trigger rescue services and save lives. End-users also benefit from education, loyalty and rewards. All these elements delight the end-user and put insurers in a position to finally deliver an insurance experience that’s more akin to those other mobile experiences consumers are delighted by, think of consuming music on Spotify. Insurance in our vision can now deliver the same level of engagement.
How can insurers use the combination of connected car and mobile phone data to develop new propositions?
Combining connected car data with mobile phone data enables a range of new propositions for insurers. At the simplest level, mileage-based policies are something we all know post-pandemic. More people are working from home and driving low mileage, and we see an increase in the number of mileage-based insurance products launching. Obviously, this becomes much simpler with accurate odometer data from the vehicle. But with the mobile phone also collecting data, we can create hybrid mileage-based propositions by factoring in behavioural data.
One of our clients has just launched a really clever mileage-based policy. The user pays a base subscription cost and pays for their miles, but for good behaviour they get rewarded with bonus miles, which I think is a really clever way of bringing behavioural insurance policies to the masses outside of young drivers. FloowFusion also brings together insurers with manufacturers to create really differentiated propositions, for example the Jaguar app. End-users can access all the services related to their vehicle ownership, including financing, insurance and including service and diagnostics as well. With this one integrated point of access, there’s more customer engagement and more customer loyalty. This is what the future of connected motor insurance looks like – and it’s accessible today.