CarTech - New Opportunities for an Old Industry

Technology media are obsessed with the topic of autonomous vehicles. Major car makers spend billions of dollars on self-driving technologies. At the same time, 55 percent of respondents in an Insurance Information Institute Pulse survey conducted in May 2016 said that they would not ride in an autonomous vehicle. While technology is advancing at an impressive speed, it will take years (and probably, even tens of years) before the legal system and human psychology catch up.

Until then, we will see changes in traditional cars such as adaptive cruise control, assisted parking, front collision warning and blind spot information, for example. Consumers are ready to pay premium for these features because they make them feel in control, but at the same time, add safety and convenience.

While the level of awareness about Advanced Driver Assistance Systems (ADAS) is still low, the majority of drivers who have used them appreciate the value added by the technology. According to a recent McKinsey study, 89 percent of Americans who have ADAS installed in their cars are going to look for this feature when shopping for a new vehicle.

Insurance Companies – Navigating Complex Landscape of Connected Technologies

With expected decrease in car ownership in the US as well as the increasing complexity of vehicles' software, insurance companies are testing innovative solutions to integrate new technologies into their practices in order to attract and retain customers.

Usage Based Insurance (UBI) is one of the options currently available on the market. The program gives drivers customized insurance rates based on their driving time and habits. Progressive and Allstate have already accumulated over 25 billion miles through their UBI programs.
Telematics as a part of the UBI proposition gives drivers incentive to adopt safer practices. In addition, it can increase the speed and accuracy of accident reporting, thus, significantly improving the response time to help the victims.

Eight out of the top ten industry players in the US offer telematics programs as a part of UBI to their customers. But the adoption rate is slower than expected. Consumers are not excited by simple reward offerings, especially considering that the savings are small and not guaranteed. They are looking for additional features, safety being the number one.

CarVi – Improving Safety on the Road

CarVi , a Silicon Valley based firm, represents the growing breed of car tech startups that responded to the market demand for "smarter" cars. The company designed an affordable mobile driving assistant system which includes a stylish dashboard camera connected to an app on your smartphone. The camera streams data in real time, and CarVi's software analyzes the information and alerts a driver in case of a danger. It also includes an intuitive coaching system to help the user improve their driving skills.

The company is currently pre-selling the device through Indiegogo and is planning to have it in retail later in September of this year. So, for $299, you can add superior safety features to your car regardless of its age or model.

CarVi's Advanced Driver Assistance Systems (ADAS) offers interesting opportunities for auto insurance companies. The system tracks careless driving, lane changing, jackrabbit driving and similar risky behaviors and calculates a driver's performance score. This information provides valuable insights into the driver's behavior and can significantly improve accuracy of risk assessment for insurers.

Traditional insurance heavily relies on the driving history and demographic characteristics when calculating the premiums. It puts many groups (for example, young drivers) into unfavorable categories, sometimes making car ownership too expensive because of prohibitive insurance costs. In reality, driver's behavior is a much better indicator of potential future claims.

Usage Based Insurance combined with CaVi's ADAS data and safety features will allow insurance firms to design customer-centric solutions, attract lower risk policyholders and save money through more precise premium estimates and a decreased number of accidents.

The Future of the Car Industry: Marring Traditions With Innovations

Cars are becoming an important segment of the Internet of Things industry, and those who are involved in the auto making, service, and insurance industries are getting more and more technology dependent. This is why every year, the Consumer Electonics Show in Las Vegas attracts major auto companies and the auto area of the Expo keeps expanding.

Price Waterhouse forecasts that the value of entire connected car market will grow to 113 billion euros ($123 billion) by 2020, with driver safety and assistance products accounting for 70 percent of this expansion.

Each new generation of vehicles is equipped with new, more advanced automated features. Ten years from now, our cars will be significantly smarter and safer. But even today, we can enjoy the fruits of technological progress and make our driving time less stressful by using new devices like CarVi.