"The world’s most valuable resource is no longer oil, but data" said The Economist back in 2017. In the three years since this truism has become more evident as shown by Tesla.
It generates more actionable data from its vehicles than any auto manufacturer including GM with Onstar. It is a master of autonomous vehicle software and Elon Musk has set his eyes on leveraging that for better underwriting performance so as to offer Tesla owners ( the better drivers that is) lower rates as he believe incumbent carriers overprice cover for his customers.
On the other hand, auto insurers cover all makes of vehicles and a Tesla owner is likely to have another make of auto to insure. So carriers can offer multi-vehicle, multi-product offers compared with Tesla's single product offer. And Onstar for that matter.
To underwrite better than Onstar and Tesla carriers must leverage all the data they store from all product lines, all contacts and both the quote and buy, sell and renew and claims activities and events.
Yet how much of its data does an insurer actually analyse? Reference Garther, Celent and others and the answer is just around 20%! Imagine Sat Nav that guided you on a journey using only 20% of road, conditions and traffic data! I'd rather not only to arrive at the wrong destination or the right destination only far too late.
Yet insurers were founded on data and that was the competitive advantage. What went wrong?
The answer had better be found as not only the Teslas and Onstars of this world are liable to outperform insurers on data management and mastery. The Digital Giants do that every day and the rumours of Amazon et al entering the insurance industry simmer in the background.
Insurers have it in their power to compete strongly by accessing and analysing 100% of their data. To find out more why not join Instech London on December 3rd for a timely webinar. Follow the link below and in that article you will find the registration details.
It could be one of the most influential impacts on competitive advantage and future growth. Nothing to loose and much to gain.
General Motors Co., through its OnStar subsidiary, will offer insurance coverage that will compete with traditional auto insurers by using data from owners’ vehicles to set their insurance rates.