From the Chicago Tribune, Dec. 5:
Car insurance industry, meet potential disrupters Google and Apple.
Currently,
nearly all mainstream insurers that offer driver-monitoring programs
use relatively expensive devices that plug into a portal under the
dashboard.
Usage-based insurance programs, also called telematics, are a small but growing segment of the auto insurance business.
Developing
Android and iPhone smartphone apps, in contrast, would cut carriers'
upfront costs when they offer telematics insurance programs, which track
policyholder habits such as mileage and braking in exchange for
potential savings on insurance.
The prospect of smartphones
becoming the central nervous system of usage-based insurance could
disrupt the property and casualty industry, which historically has
gathered its own loss data and kept that information in-house.
Google and Apple also have other advantages, including being
ubiquitous in the lives of many consumers and having been accepted as
big data collectors.
"Because of what Google and Apple can do,
they are in the position to gather so much data, and that data may be
more insightful than traditional variables," such as credit scoring and
motor vehicle records, said Sandeep Puri, a Deloitte consulting director
and co-founder of D-rive, the firm's auto insurance telematics
business. He offered his insights while participating in a Telematics
Update panel discussion titled "Big Impact Disrupters Enter the Market"
in Chicago.
The balance of power in driver-monitoring programs
could shift to Google and Apple if smartphones catch on as usage-based
insurance policies, Puri and other speakers at the event suggested.
They
also raised questions such as: What happens when, say, Google has the
data about losses to insurers? Does it charge insurers for it?...MORE
