Apr 27, 2015 | By Nigel Walsh
Behind new fuel cells, connected cars are the next biggest disruptor driving innovation in the automotive industry. Today’s cars can already park themselves, help drivers avoid traffic, and automatically find the closest gas station when the tank is low. In the very near future it will be the norm for cars to be autonomous. Connected cars are aligning with car owners’ digital lifestyles and offer a safer, smarter, and enhanced driving experience.
For insurers, however, connected cars are altering the traditional landscape of auto insurance and posing real challenges that require insurers to rethink policies, claims processing, and their overall business models. Insurers who evolve with the automotive industry are the ones who will secure their place as industry leaders going forward.
Leveraging big data is mandatory
The challenges for insurers
While data collection and analytics from connected cars provide the insurance industry with opportunities to gain customer insights and improve business, it is not without its challenges. The sheer volume of data generated through connected cars can be overwhelming. In one 12-month pilot, U.K. insurer Direct Line Group gathered more than 11 million miles of data from connected cars. Going forward, insurers need to learn how to manage and distill this large volume of data in an effective and efficient manner to drive real business insight.