- Where Insurance & Technology Meet

Apple Auto: What Would DeLorean Say?

There is major buzz around the tech giants getting into the automobile business, the most recent of which is a growing mountain of evidence that Apple is acquiring assets and resources in aid of its push.

I have no idea how an Apple entree into auto manufacturing will play out.  However,  my Detroit soul is at high alert to two things:

  • I think I’ve seen a low-budget prequel to this and wonder how it will track; and
  • An Apple entrance might hold good news for the insurers who are prepared.

Back to the future

The word ‘DeLorean’ usually conjures up a movie with a gull-winged, time-travelling car by the same name.

But for auto historians, the name calls to mind John DeLorean, who was a great maverick in the very closed, conservative  community of automobile executives. in the 1960s, and 1970s.

DeLorean was a good  engineer and a brilliant marketer.  He helped General Motors introduce important technical, patented  innovations  and deliver iconic vehicles, including the Pontiac GTO and the Pontiac Grand prix.

Delorean was a maverick within the highly corportte GM environment.  He famously drove foreign sport cars to work, contravening a company rule that only GM vehicles would be allowed in the lot.  In spite of it all, worked his way to the head car an truck production for GM, the step  below president.

However, DeLorean’s patience with the establishment and the board’s tolerance of his eccentric ways led to a an agreement seeing DeLorean on the outside looking in.  From there DeLorean created a business and car in his image, and with his name.  Unfortunately, delays in production saw consumer interest change, and the result was receivership for the business and immediate collector status for the car.

Is it Apple Time?

DeLorean reminds me of Steve Jobs. Driven, brilliant, iconoclastic, occasionally tyrannical, and irritating to established leaders. They both encountered failures and fought for commercial redemption. Jobs clearly succeeded; DeLorean, not so much.

How does this relate to the Apple Car?  There is as much or more competition facing Apple as DeLorean encountered.

In spite of the humbling that US Automakers have taken over the past two decades, they are still a powerful force (witness the financial guarantees from various governments in the wake of the 2008 Great Reset).   And the second tier competitors (Mercedes, BMW, Tesla, Google?) have got the innovation message in spades.

A few  things Apple has the others don’t….

I think has some unique advantages, one of which could be insurance.

  • Apple has cash that wants to be deployed following a future vision. Jobs set the standard for deployment of capital in his resurrection of Apple with the introduction of an internet-first computing environment, while maintaining the closed internal architecture.
  • Apple understands the complete user experience.  In relation to the automobile, a recent article in the Globe and Mail says it well:

Drivers are demanding in-vehicle entertainment, electronic and communication systems that connect seamlessly with those in their homes and offices, as well as such navigational devices as active cruise control, lane departure warning systems and apps that find restaurants and gas stations.

  • Apple has an amazing relationship with its app suppliers.  In reviewing the upcoming Apple Watch, the Financial Post notes: “When Apple Inc.’s iPhone was released in 2007, the initial driving force behind the smartphone was its must-have applications, all available in one convenient location, the App Store. “

Insurance? There’s an app for that…

All this together suggest that when the Apple Car gets introduced, there will be a lot of usable apps, including, possibly, an insurance app.  The vehicle will have all the sensors required and, assuming the user has an iPhone or iWatch, there can be verification of the driver included.

The underwriters/distributors could be identified or white-labeled.  The technology, including verification of coverage and response in the case of accident or breakdown, could be handled by the telematics suppler or another third party.

This is a scenario, but …

I have no inside knowledge of anything relating to the Apple Car, much less an insurance app.  There are lots of hurdles.  The biggest one is having the wherewithal to follow the dream.

I go back to DeLorean.  He had a target audience that he wanted to serve, and met the technical requirements, but failed when the money ran out (and after he was charged with trafficking cocaine, but that’s another story).

Jobs had the audience and had the technical strength.  And he won, because he had just enough money, and chutzpa,  to keep going.  Now, the problem Apple has is finding places to deploy capital.

This tells me that correct vision and sufficient money build successes.  I’m going long on Apple and have 75% confidence that insurance will be blended in.

What do you think?

I’d love to hear your thoughts on this.