Data ingestion from cars is gaining importance beyond shared mobility, where it was always recognized as significant. Fleet operators for car subscription companies, rentals, and commercial-fleets are leveraging data to reduce costs, increase revenues, and improve clients’ experience. They pull data from OEM telematics units found in most new cars, making vehicles digital-ready seamlessly. OEMs are providing richer, robust data via factory fitted telematics than ever before.
An example is MSPF, an open platform developed by Toyota Motor Corporation that provides a variety of functions. Vehicular big data gathered by Toyota’s connected vehicles is managed by a cloud service and offered via multiple APIs for vehicle management and authentication. The platform is actively championed by partners, such as ride-sharing and insurance companies, who provide joint services based on vehicular data.
Key features include:
- Location Based Service – API service that provides Map, POI search, Traffic Information and Route Guidance
- Smart Key Box – an onboard device that implements secure door locking/unlocking, engine startup for car-sharing. Simply by installing the device in vehicles, the key needed to borrow a vehicle can be transferred to a smartphone safely and securely.
Other OEMs have similarly been expanding their API offerings.
The SAMOVAR DRIVE project, one of the most widely cited studies of telematics devices in the world, sponsored by the European Union, along with a series of U.S.-based studies conducted in later years demonstrated that installing telematics systems into vehicle fleets cuts accident occurrences by 20-30%.
In addition, OEMs are going beyond making vehicles tougher to designing cars that actively avoid accidents in the first place. Crash prevention technology is appearing across the spectrum of cars. Swedish car maker Volvo’s City Safety technology is capable of braking automatically if the driver turns in front of an oncoming vehicle, potentially avoiding a head-on smash, and automatically brakes at intersections.
In personal auto insurance, inaccurately priced premiums cause millions of dollars in losses every year. The tasks involved with correctly matching risk to rate are complex. However, few factors that contribute to inaccurate pricing, can be easier to verify. Mileage, for instance, is a good indicator of the number of at-fault claims a driver will file. Underreported mileage is known to cause an average 2.6% loss per policy. Using APIs to read odometer, the insurer’s application can curtail such leakages.
Garaging location is another factor, rarely verified, that leads to more than 10% of policies with verifiable garaging inaccuracies. An example is of policyholders forgetting to update their garaging address after moving. Sometimes, policyholders lie about garaging location to get better rates. As a result, insurers lose an average of 1.4% in leakage per policy. OEM APIs can be used to easily verify each policyholder’s garaging location. Similar to mileage and garaging locations, incorrectly reported VINs cause insurers millions of dollars in annual losses. More than 5% of policyholders report an incorrect VIN to their insurer. Here, insurers lose on average 1% on each insurance policy. Altogether, that’s 5% in average losses.
Indicative price points from connected data platforms are illustrative in pinning down value from key segments, with fleet operators pricing at $25, insurers at $15 for usage-based-insurance and car dealerships at $15 per-vehicle per-year. Consider the average annual car insurance premium in the U.S. of $1,056.55 in 2018, per 2021 Auto Insurance Database Report. That translates to platforms charging 1.5% of average premiums against potential leakage prevention of 5%. Add to that the 20-30% reduction in accidents mentioned earlier, auto carriers are headed towards multiple tech-driven opportunities to reinvigorate technical results.
We can expect to see more and more data available via OEM telematics. This encompasses driving behavior data, eco-scores, data from road signs recognition and autonomous driving. Car data will gain increasing prominence, with value accruing from its large untapped potential.
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