Your Car Does Not Lie

All of us have likely been in some sort of vehicular accident at some point in our lives. However, a 2009 NHTSA study showed that many of us do not report all bumps and dents because we do not want to admit to our spouses or insurance carriers that our erratic driving resulted in a minor collision. An example of this would be denting another car while reversing out of a parking space. Also, statistics showed for decades that older and younger, and here especially male drivers, are more collision prone than your average middle-aged female.  A South African smartphone app demonstrated that drivers think of themselves as safe at a much higher and unrealistic (2.5 times) rate given their use of phones for calls and texting while driving.

However, is there a way to correlate telematics data to not only indicate patterns of unsafe driving in families, households (not necessarily a family), circle-of-friends, job titles or even people with similar hobbies? If so, would this not position automotive firms as the go-to source for risk data? In such a case, why are automotive firms not selling property & casualty insurance with every new or used vehicle sale? Well, it is coming soon to a dealer near you despite various state laws, e.g. Arizona, prohibiting the sale of ancillary services like insurance.

Insurers and OEMs are already nudging closer together, e.g. Nissan and Liberty Mutual, to improve recall notification awareness or guarantee OEM parts for repairs. Packages will suddenly have OEM branding, which will require licensing in all states to improve the customer repair experience. So it would be a minor leap forward to own most coverage options outright.

Once subscription-based, self-driving cars are appearing on the road, large insurers are already thinking about the impact to their business model.

After all, collisions will then be squarely in the hands of software, not people, so who would be better positioned to insure the vehicle (not the person) than the OEM, who wrote the software (or had it written…see prior post).

But back to the human factor here. The NHTSA study collected a myriad of variables to assess collision risk. Anything from past violations (public DB), demographic data (available to OEM at purchase and hopefully updated via their driver/dealer portal), health data (health insurance DB), driving data (OBD, sensors, radar), driver sleep hygiene and stress (camera, mic), life stress (social media), field-of-view (camera), waypoint data (OBD, location data) and personality test (at purchase). The study (and today’s vehicles) assessed things like: improper passing, inappropriate speed, improper turn, failure to buckle or dim headlights, etc.


You think you'll laugh once your car reports you for a premium hike?
You think you’ll laugh once your car reports you for a premium hike?


The study found that the mean gap between an unsafe and a safe driver is just 4 years (age 34 to 38). The delta in driving experience was just around 6 years (17 to 23 years).

Another interesting result was that there are just about as many unsafe female and male drivers, yet there are more than double the amount of unsafe male than female drivers.

Moreover, it found that the leading risk indicators are improper braking, inattention and improper proximity to another vehicle during adequate daylight conditions.

Knowing even a variation of this based on driving information can have significant ramifications on premium income. For the OEM R&D process it means developing the right passive and active driver-assist applications to close the gap. More importantly, the suggestions to the vehicle’s brake, steering and alert systems need to be adjusted based on age, driving experience, gender and a whole number of variables to really move the needle.

By the time all is said and done, the car and by extension the OEM, may know you just as good as your buddy. If an OEM were to merge with a carrier selling p&c as well as health/life insurance, they would probably be able to predict the location, severity, health impact and financial exposure of your next crash. Impressive but scary.

What else does this represent? Well, not only will the frequency, message/action and formatting of any corrective behavior differ depending on who is commandeering the vehicle (driver risk profile), it will also impact what available infotainment options are available to him/her and the passengers.

Certain content raising aggressiveness in the vehicle will be blocked/available during certain phases of the trip (turn, backing up, highway, beginning/end of route), ads and offers by local merchants may displayed as voice or banner only with no details vs full-screen display.

The car will become an iPhone on wheels and the OEM will be Apple….or Apple will be the OEM.

Is the human race ready to hand over its privacy and trust to a corporation in Detroit, Stuttgart, Wolfsburg, Turin or Tokyo? That remains to be seen but I think within the next 3 years OEMs and their suppliers will have figured out how to make money with telematics data either through taking market share via improved safety, entertainment and productivity features in their vehicles, improved repair efficiencies from JIT service or ancillary services like insurance.

Are you ready for your car manufacturer to be your insurance carrier and answer some personality questions at purchase for a better rate?