The future of car insurance: leveraging connected vehicle data
We are talking to Roman Swoszowski, VP of Cloud and AI R&D at Grape Up, about the future of car insurance and specifically the role of telematics.
Grape Up is a software consultancy that helps insurance & automotive companies build custom software. It specializes in developing advanced telematics solutions with a focus on connected car technologies. Driving innovation in the Motor insurance area, and helping their clients build software for other business lines including property and commercial.
How would you describe Grape Up?
As a software consultancy our focus is on helping our customers build software which allows them to improve how their business is operating. And these improvements can apply to all the elements of the insurance value chain, so we work with underwriting, claims, fraud, platform, and many other business units. Grape Up is a modern tech expert and the innovative solutions include Cloud, IoT, AI and Telematics technologies.
What is your view on connected cars and the opportunity for insurance?
Recent years have seen an acceleration of technology innovation in the automotive industry, which results in an increasing number of connected vehicles on the roads. Insurance companies have been offering usage and behavior-based products for years now, using telematics data from black boxes, tags and mobile apps. The availability of connected vehicle data is a game changer for insurance companies, being richer, more accurate and hassle-free for consumers. But most importantly it paves the way for the insurers to offer new products and services to their personal & commercial auto lines customers.
We can already see some of the largest US-based insurers like State Farm or Nationwide offer their customers the option of sharing the connected vehicle data as an alternative to using mobile apps and telematics devices. We can expect it to become a standard over the coming years. It is a part of a larger change in the industry where we see that organizations push towards becoming data-driven organizations and aim to consume and process as much data about their customers as possible.
Do you see any best practices or best moves?
Those companies which seem to be most advanced in their efforts to leverage connected vehicle data, often form direct partnerships with OEMs. This is a smart move which allows them to access the vehicle data without the need of using 3rd party services. Of course, it requires effort to build internal capabilities in order to handle the data and extract insights but in the long term it will be well worth it. And another thing I see is it is better to show up too early at a party than too late. In other words, those who invest early in innovation are those who benefit the most when the innovation becomes a market standard.
Where is the industry is heading to?
With the fast-paced changes, we can expect that soon the traditional vehicles without the embedded connectivity will become obsolete. According to researchers, by 2025 there will be more than 400 million connected cars in operation. This doesn’t mean that mobile apps and tags will no longer be needed to offer telematics-based products, but it is an indicator that at some point the majority of UBI policies may be based on connected vehicle data.
There will be a steep learning curve for the early adopters when it comes to solving all the technology challenges. The sheer volume and complexity of connected vehicle data may seem overwhelming for those without strong cloud and advanced analytics capabilities in house, but with the help of industry experts the expertise can be built and expanded over time.
What do insurers need to do?
Insurers should start by answering key questions like: where connected car data will deliver the most value for my business? What internal capabilities do we have and need? Do we have the required infrastructure, process and skills to leverage connected car data? What investments in technology are necessary to deliver on our goals? Lastly, they need to consider whether they can better and faster achieve those goals by building required capabilities in-house or working with partners.
In addition, there is the regulations factor. In the USA, insurers can work directly with OEMs and form partnerships as they see fit. In the EU the current situation is slightly more complicated, with European Data Protection Board regulations stating that the insurers cannot process the connected vehicle data unless they receive it from a telematics service provider. However, the regulations are likely to change as the importance of this topic will only grow with the increasing number of connected vehicles on the roads.
Who is Grape Up?
Grape Up provides software development and consulting services for insurers, mobility providers, and major automotive brands. Ensuring technology expertise at the intersection of insurance and automotive industries, Grape Up empowers P&C companies to build innovative data-driven solutions meeting the needs of the auto and shared mobility lines.
Founded 15+ years ago, Grape Up has built its technological expertise in the early days of cloud computing, initially helping startups develop and deliver their products to the market.
Grape Up has established a proven combination of the software development practices based on a DevOps philosophy and technological expertise in AI and Cloud Native. The company operates globally with major focus on North America and EMEA regions with enterprise customers such as Allstate, Porsche, Volkswagen, Hertz or Europcar.