ADAS data classification helps the automotive OEMs with strategies for monetizing data.
A recent article from Reuters, ‘Data-Deprived Auto Insurers Cautious About Discounts for Advanced Safety Features,’ called out that insurers don’t have enough related data and resulting insight to give drivers discounts on ADAS features. The author spoke to a number of insurers and re-insurers who ‘cite car manufacturers’ reluctance to provide detailed information on models sold with those features, a lack of consistent standards, drivers’ unpredictable use of the systems and higher repair costs.’
My response is that this is actually music to the ears for those of us who have spent our careers in auto insurance pushing boundaries and deriving insights from large amounts of data. We have been working the last several years to bring the insurance and auto manufacturing industries together, and we have some good news for insurers of all sizes and automakers, too.
The biggest argument: ‘Not Enough Data’
This has been true. From what we’ve seen and heard, auto manufacturers have been hesitant to release this data, mostly citing concerns about the data getting into their competitors’ hands. We’ve worked hard to address those concerns. What is still true is that only the largest insurance carriers would have enough ADAS-equipped vehicles in the books to produce actuarially credible pricing related to these features, even if it had been available to them. There’s a light at the end of the tunnel, however.
Consumers want ADAS features that will help keep them safe and they want insurance discounts for these features. When we conducted a study to ask US consumers about ADAS, results showed that safety is the most understood and most popular aspect of ADAS (for 80% of drivers). This is followed by the prospect of cheaper insurance (52%), less stressful driving (43%), increased driving efficiency (40%) and easier driving (37%).
The best automakers will realize that ADAS data will help them with existing strategies to monetize their data. But monetization of data is only part of the story, since a much bigger incentive is the potential to sell more ADAS features. With insurance premium savings to lower the total cost of ownership of their vehicles, automotive marketers have one more value proposition to do just that.
For consumers, this data can help drivers understand the true wisdom of purchasing vehicles equipped with ADAS and enable better consumer choice. Insurers with insight in their hands can use the information to reinforce the wisdom of that purchase by providing consumers with a price commensurate with their risk.
We need a solution for the unpredictable use of ADAS systems. Is there one?
It is true that many ADAS features can be turned off altogether, or can be configured by drivers to be less sensitive than the manufacturers might ideally recommend. The balance between safety and convenience is likely a tough one for automakers to strike. We’re already working on solutions to that problem with automakers, where we can take connected car data relating to the on/off status of these features, and in turn help carriers to make the most informed pricing decisions possible.
Automakers and insurers should have similar motivations for sharing ADAS data: both serve the same consumer who demands safer cars and lower corresponding premiums, and both want to develop products that will sell better and faster than those of their competition.