How to solve the ‘many to many’ problem of connected car data

Worldwide, sales of connected cars with embedded telematics are estimated to have hit 28.5 million units in 2019, and by 2023 it is predicted Europe will have the largest connected car parc globally.

As cars are becoming more connected, says Andrew Ballard of LexisNexis Risk Solutions, they are also becoming safer through the continuing advances and growth in the availability of Advanced Driver Assistance Systems (ADAS).

These developments are creating a rich stream of static and real-time driving data that can support more personalised motor insurance based on the car’s safety features and the customer’s driving behaviour.

Car manufacturers fully understand this potential, anecdotally mentioning that they often invest several hundred pounds on average per vehicle to make their cars connected so that they offer more value and more services such as enabling usage-based insurance (UBI). The challenge has been how to make this data accessible and workable for the insurance market globally.

Adding ADAS data to insurance

Insurance providers have found that deciphering the precise specification of ADAS on a vehicle is very complex with a variety of standard and optional features that will include a variety of ADAS equipment. They, therefore, need a way to logically sequence and classify the ADAS features on a specific vehicle based on the component’s intended operation and purpose.

With this core knowledge of how specific vehicles are equipped at a Vehicle Identification Number (VIN) level, intelligence can then be built around the effectiveness of ADAS features in isolation or in combination in reducing insurance claims. This insight can then be used to help calculate accurate and fairer pricing so that customers can be rewarded for the investment they have made in ADAS when they purchased their car, through potentially lower cost insurance.

To address this challenge, we built an ADAS classification system for the insurance market. More than 2.7 million vehicles have been assessed across four European countries to understand how the specific ADAS fitted to a vehicle can impact insurance claims in the real world. In addition to using ADAS data from 3rd party vehicle data sources, European car manufacturers such as Mercedes-Benz Connectivity Services are now starting to share ADAS data and insight with us, resulting in 80% coverage of the European market.

Using all the intelligence gathered over the past year, the confirmation of the safety features of a car, along with how well they perform is becoming accessible to insurance providers in Europe, at a Vehicle Identification Number (VIN) level for insurance pricing and underwriting allowing for greater precision with quotes and renewals.

The ‘many to many’ problem

Moving on to dynamic ‘real-time’ data from a connected car. This data on how a car is driven offers the ability to provide usage-based insurance such as mileage-based products and pay as you drive (PAYD) solutions. However, this raises the ‘many to many’ problem of connecting many car makers to many insurance providers for many vehicles and their drivers. One-to-one connections between hundreds of insurance providers and all of the world’s car manufacturers wouldn’t work.

Aside from the practicalities of linking car manufacturers and insurers, the data flowing from millions of vehicles will need consumer consent to share with the insurance market and it will need to be standardised so insurance pricing is consistent regardless of the vehicle make or model a consumer is driving.

Connected car data exchanges

The solution lies in connected car data exchanges which enable car manufacturers to share data with insurance providers in a normalised, contextualised and standardised manner. A data exchange acts as a bridge between these two markets, removing a lot of the complexity, cost and compliance issues car manufacturers could otherwise need to solve to make insurance part of the benefits of a connected car.

By enabling car insurance providers to access connected car data in this highly secure environment, consumers will have the choice of subscription, pay per use, pay per mile and other mobility models of the future where managing risk and providing insurance cover will remain a vital element.

Customer trust is critical

Front and centre in these developments focused on vehicle centric data is customer trust and consent to share and use connected car data whether this is led by the insurer or car manufacturer. Each market has processes which can be effective.


Andrew Ballard

The European Union has also initiated several funded projects designed to increase consumer confidence in the use of personal data generated by internet connected devices. The Project smashHit consortium has been tasked with creating a secure platform for connected car data sharing for specific use cases. As part of this consortium we are working closely Volkswagen Group and using our experience supporting the insurance and car manufacturing markets in Europe to focus on consumer consent for UBI derived from connected car data. 

In a study, 53% of European motorists said they would be willing to switch car brands to gain access to new connected car features. Car manufacturers recognise this threat and opportunity. The connections now being made with the insurance market will help ensure their ‘shared’ customer benefits from more personalised insurance, lower car ownership costs and safer journeys.

The author is Andrew Ballard of LexisNexis Risk Solutions.

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