Simply put, the connected car data sharing business is hot and growing.
This at a time when the data cars and drivers’ smartphones generate is being used in many new ways. When consumers opt in to share it with auto insurers, for example, they can receive auto insurance premiums that are based on their actual driving habits rather than more general information like their miles driven, location and demographics.
But one platform’s plans for using telematics and phone data can be put to use better use in the connected economy. According to recent announcements, Arity, founded by Allstate Corp. in 2016, is forging partnerships with insurance companies, automakers and other sharing economy companies to help them better understand driving behavior and manage risk.
“We have a lot of good things going on, one of which is Arity,” Tom Wilson, chair, president and CEO of Allstate, said during the company’s third-quarter earnings call on Nov. 4. “Significant value has been created by Arity, both in the insurance business and outside the insurance business.”
A Growing Market for Data
Allstate not only uses this data from the Arity platform itself, but also sells it to other insurance companies, Wilson said. He added that competitors are going to use it anyway so Arity might as well provide it.
“We have 6 billion miles of data, we’re a risk scoring operation, we help people do marketing more effectively and efficiently, and so we’re really building quite a platform that will do a number of things,” Wilson said.
Arity also supplies data to companies outside the insurance space. And revenue increased during the third quarter due in part to its expanding total addressable market (TAM), Allstate reported.
In October, Arity announced that it was making data on more than 100 million drivers available through the online advertising marketplace Transparent.ly, enabling insurance marketers to bid on reaching customers with the levels of risk they want to target.
In June, the firm partnered with the travel and navigation app GasBuddy, allowing the app to give users notifications suggestions on how to optimize their fuel consumption and save money, based on their prior driving behavior. It will also share customized offers based on the way they drive.
In April, Arity said that it has been partnering with the family safety app Life360 to detect collisions and allow Life360 to dispatch emergency responders. Arity uses sensor data from cell phones to identify in real time when they have been in a collision.
Increasing Comfort with Sharing Telematics Data
Consumers are getting more comfortable sharing data from their connected cars and their smartphones in exchange for added convenience and safety, Arity reported in a blog post.
Between May 2019 and May 2020, the percentage of consumers who said they would be comfortable sharing telematics data to optimize their insurance premium rose from 40% or less to 50%.
This was driven in part by the pandemic, the company says, as consumers realized they were paying for auto insurance based on their pre-pandemic mileage even as their vehicles sat parked during lockdowns and while working from home.
“Significant value has been created,” Wilson said of the Arity business during the earnings call. “I don’t think that shows up in shareholder value today because I don’t really see any of the analysts really looking hard and saying what it’s worth, but we think it’s a substantial value and we expect to continue to grow that business and expand its total addressable market.”