- Where Insurance & Technology Meet

UBI Resuscitation: A Two-Decade ‘Overnight Sensation’

Back in the late 1990s, several insurance companies decided to move beyond static automobile rating and use actual vehicle data.

After a long, slow start, new digital approaches and shifting consumer mobility needs are offering a larger opportunity. And you have an opportunity to see the drivers (pun intended) at the 2018 Technology Conference.

It started out so simple …

In the 1990s, Aviva and Progressive were two leaders in the North American market. Methods to transfer data were clumsy and the programs came to a halt.

Follow ups in the first decade of this century, were less cumbersome, and the technology more accurate, but there were concerns about privacy and uncertainty, so the uptake was better, but not as vibrant as expected.

But interest is being developed on a different basis – and could be the real sensation.

It’s the Mobility, Stupid …

Catherine Kargas, Vice President at MARCON, has told us for years that vehicles, including self-driving vehicles, are not interesting on their own. They are part of a bigger picture referred to as ‘Mobility’.

What is ‘Mobility’? My simple reads is that the method of getting from one place to another is less important than getting to a destination on time, with the required materials, and within budget.

Why is this important now?

People are moving to cities the world over. According to Maclean’s, the 2016 census found that Canada has 35 ‘census metropolitan areas (CMAs)’, up from 33 in 2011.

Good news. However, transportation is close to permanent grid lock. Eighty to ninety percent of commuters are alone drivers. CAA estimates that Toronto loses C$11 billion in productivity from traffic congestion.

Solutions to this are required – urgently – to maintain a competitive position in commerce and to attract new resources – human and otherwise – to an attractive, progressive environment.

What Happens in Vegas Travels Around the World

And this all requires a creative, ambitious environment that includes progressive transportation.

Andrew Lo, President and CEO of Kanetix, Ltd., is a big fan of the annual Las Vegas CES show in early January. This year, he took to authoring on the side.

Writing in InsurTechNews: “CES 2018 Trending: Insuring the Smart New World.” Lo notes that Mobility is a hot topic. And Telematics is a critical element to the larger view of things to come.

Andrew sees a plan!

Autonomous vehicles must gather data and respond in real time. The emergence of 5G WiFi will be “more reliable and with almost no latency”.

Moreover, these data will drive next generation hardware, which will include image recognition, AI applications, virtual and augmented reality, etc.

A virtuous circle.

But concerns remain

An international AIG study on autonomous vehicles provides some interesting concerns.

Slightly less than half (41%-46%) of US, UK, Canada, and Singapore drivers felt comfortable sharing the road.

And when asked about hackers 75% of US, Singapore, and UK consumers said they were concerned about hackers and 67% had worries about data privacy.

This needs tending.

So what about insurance?

Lo references AIG executives Lex Vaugh and Gaurav Garg who noted that the rapid emergence of new mobility solutions will not eliminate risk. Rather, it just shifts this risk elsewhere.

Lo writes: “Car makers such as Volvo, Mercedes-Benz and even Google have made public that if their commercially available vehicle that’s being operated in autonomous mode is at fault for a collision, they would take liability and responsibility.”

That seems reasonable. However, we would expect that the regulators in the various countries would be on top of the details. And, on a wider landscape, Kargas has mentioned that Mobility will bring methods to mitigate and fund risks in the new world.

Want to know more?

At the 2018 Insurance-Canada Technology Conference, you will find Andrew Lo, Catherine Kargas and other mobility experts Cletus Nunes, OCTO; Gwenn Bézard, Aite Group, and David McGown, Insurance Bureau of Canada.

You can more details here 

What do you think?

After a slow start, there seems to be momentum to introduce new constructs to facilitate mobility, with security in place with insurance.

We’d like to get your thoughts.