Innovation

Insurance And Other Services Get Smarter Via Connected Vehicles

connected car

It’s not just cars and trucks that are undergoing historic changes thanks to digital and mobile technology, and the drive toward the connected vehicle and autonomous driving ecosystems. The whole automotive culture — and that includes payments — is transforming.

Proof of that comes from the U.K. There, according to TechCrunch, a company called By Miles is launching what it calls a connected vehicle policy for owners of Tesla automobiles. As the report states, “The new insurance product pulls real-time mileage information directly from a car owner’s Tesla  account and uses the distance they have driven to price their insurance each month. It claims to be the first car insurance policy to take data from a car without the need for a ‘black box’ or aftermarket device.”

Auto insurance is preparing for changes as the connected vehicle ecosystem comes into being, and as consumer driving habits shift, including via sharing economy efforts. But questions remain about how this will all work.

Consider the F-150 truck, the most popular version of the Ford F-Series, among the most popular automotive product lines in the United States. A typical owner of an F-150 spends $1,890 annually for insurance, part of a “value chain” that amounts to $7,000 per year for gas, maintenance, tolls and other costs, according to a presentation from Ford Connectivity and Emerging Services Global Director Mike Tinskey.

Smarter Insurance

Payments for insurance generally belong to the insurance company. But what happens when the sensors and other data-collecting and data-transmitting technology installed by the original equipment manufacturer (OEM) play a part in insurance costs? For instance, a driver whom sensors show to be safe and cautious might end up paying a lower premium than someone whose foot is glued to the gas pedal while speeding through a school zone.

According to an account of that presentation, “Tinskey said the number of embedded modems in Ford vehicles will continue to increase very quickly, and a modem in the example F-150 could change spending for every one of those items, and insurance is no exception. The implication seemed to be that the OEM could capture a cut of that $7,000 by facilitating such transactions with a connected car.”

The central issue at hand is control of data — a question that hovers over the entire ecosystem of connected car and truck manufacturers, software providers, commerce firms and others engaged in the competition for footing in this emerging industry.

New technologies are also playing a role in the larger world of insurance, as PYMNTS research demonstrates. Indeed, bringing faster payments into the insurance world is no longer a luxury but a necessity, not only for connected vehicles but as the gig economy workforce continues to grow. These workers expect their insurance claim payouts to be as instant as their wages, but can often be disappointed by weeks-long processes. Bringing more automation and artificial intelligence (AI) into the experience could help alleviate that frustration, says Tim Attia, CEO and co-founder of gig economy insurance platform Slice Labs.

AI and machine learning (ML) are slowly filtering into the insurance world, which has traditionally relied on checks and other paperwork to meet customers’ needs. That traditional approach can no longer meet the needs of an increasingly digital customer base. Therefore, a rising number of insurance providers and accompanying payment providers are turning to AI and ML to help automate their processes for faster disbursements and improved customer satisfaction.

More Services

As for connected vehicles, they keep gaining new mobile and digital capabilities to appeal to drivers in this almost second decade of the 21st century. A recent example comes from BMW.

To help diners purchase their favorite foods from Portillo’s Hot Dogs and Nekter Juice Bar, food ordering platform Olo is testing out in-car ordering. Consumers can order from the restaurants directly from BMW vehicles through the end of the year, according to an announcement.

Portillo’s and Nekter Juice Bar are the first live brands to participate in the in-car ordering pilot. BMW owners can send orders to locations across the country directly from their vehicles by visiting the BMW Labs website. The pilot, according to the announcement, is “an R&D exploration of how the guest experience can translate to an in-car setting.”

The pilot is available for BMW vehicles from model year 2015 and later. Vehicle compatibility will be checked when users access the BMW Labs website throughout the remainder of the year.

The race to build the connected vehicle ecosystem continues to gain speed as the year winds down.

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