OEM connected car data platforms
OEM connected car data platforms use data from sources like in-car infotainment systems, vehicle electronic control units, and in-vehicle networks to provide valuable and usable insights. These insights inform modern mobility solutions and can be used across industries, including auto insurance, car maintenance, fleet management, targeted advertising, and many more.
In OEM platforms, data comes from the onboard computer and therefore offers precise information about trouble codes, car diagnostics, ADAS (safety systems), fuel levels, usage of the car, and more, which can be used to infer a driver’s safety. A famous example is Tesla insurance, available in several US states. It offers premiums that depend on the vehicle, selected coverage, the customer’s address, how much they drive, and the vehicle’s monthly safety score built using connected car data.
Because of the immense opportunities, the solution offers to the mobility industry, its widespread adoption is not a matter of whether, but when. For example, GSMA predicts that by 2025, connected cars will represent over 5% of all connected devices. Meanwhile, Ericsson claims that by 2027, half of all mobile subscriptions will be for the 5G network. Certainly, at some point, every car will be connected to the outside world through a cellular network, which accounts for the increasing popularity of OEM connected car data platforms and the need to start building innovative products in insurance leveraging its technology.
At the same time, while connected car data penetration is growing fast and holds great potential, there are still limitations and challenges to address today and in the midterm future. Even though most car models manufactured and distributed in the European market after 2017 come with connected car platforms, globally, most vehicles still aren’t equipped with this technology. Besides, the data access cost is still relatively high and inconsistent across brands, making it difficult to manage. These two points mean that launching a connected car data-enabled insurance today is only possible for a limited group of users. Furthermore, as in the case of dongles and GPS trackers, the location data is not available at high frequencies, which limits the capacity to detect certain driving behaviors which are possible using mobile phone alternatives. Finally, another point to consider is that when it comes to private use insurance products, for accessing each vehicle’s data, specific permission must be requested from the individual user, which makes implementation not so straightforward.
The main determinants of a car data collection solution
The transformation in the automotive insurance market is noticeable—and it owes much to innovations in telematics devices for data collection, such as smartphones, OBD devices, wireless technology, etc.
The choice is broad, and it depends on a variety of factors, such as:
- The type of program an insurer wants to build (i.e., pay-how-you-drive, pay-as-you-drive, rewards and loyalty, safety based, eco-based…),
- Hence, the type of data required to power the connected insurance program.
- The target audience of the Connected Insurance program: is it aimed at fleets? What type of fleets? Is it aimed at private drivers? Is it aimed at young drivers? Etc.,
- The volume of users included in the target audience,
- The technological conditions of the geographical market that will be targeted:
- Available car makes, models, types,
- Mobile phone penetration,
- Available telematics device models,
- Available reliable map data (including road signaling, accurate speed limits, and more).
- The cultural conditions of the geographical market:
- How people culturally react to sharing mobility data,
- How do people feel about installing hardware in their private vehicles,
- What is the likelihood of encountering fraudulent situations (like turning off the tracking device on purpose),
These factors, together, determine the level of complexity of the program to be run and the most suitable and customary device to select.
Connected insurance programs can help insurers position themselves as industry leaders. But to achieve the most complex data objectives, they must choose solutions that, apart from matching their needs and wallets, will be readily adopted by their customers. Considering the available options and scenarios, that choice may be tough. Fortunately, in case of any doubts, you can always rely on our expertise.