Collision detection and notification solutions have existed for several years across the auto insurance and roadside assistance service industries. With the understanding that drivers see the value in vehicle safety technology, automotive OEMs continue to improve upon their own built-in collision detection features.
Thankfully, technologies exist that can and do help businesses provide necessary, immediate help to drivers in the moments of truth when they need it most. However, for auto insurers especially, offering collision detection at scale has proven to be a big business challenge. For one, the cost of implementing collision detection to all policyholders can be colossal – especially, for example, as many drivers may only get into a severe crash one time every decade. Other factors like reliability and lack of business model innovation over the years have also created more obstacles for insurers.
But Apple’s recent launch of its Crash Detection feature in its new devices has sparked industry conversations around the correct formula for providing collision detection solutions at scale.
As there’s new demand for collision detection across Apple’s massive user base, now is the time for insurers to leverage reliable, smartphone-centric technologies to make this a reality.
After all, the race is on between big tech and insurers to determine who will become the true digital sentinel for drivers. Let’s explore how insurers can ensure they come out on top.
Before the new, Apple-induced consumer appetite for collision detection features, auto insurers faced challenges in providing collision detection successfully to all of their policyholders. These can largely be bucketed into three categories: scale, reliability, and lack of business model innovation.
Many auto insurers are already running collision detection via their telematics programs. However, they haven’t had massive user bases for these programs. Since collisions are rare occurrences, tech providers haven’t been able to make this type of business model work for auto insurers.
Historically, when insurers have deployed smartphone-centric collision detection solutions, they only end up capturing data for a small portion of their book of business. Insurers, therefore, pay to provide collision detection technology to all of their users, but the actual number of collisions that occur is low.
That’s long been the economic challenge for insurers – they want this collision data, but to get it they need to front the cost for the majority of the user base who don’t end up in a collision. In addition, collision detection technology directly embedded into vehicles (versus smartphone-centric solutions) is more expensive for insurers to repair and replace.
Many built-in, hardware-based, and smartphone-centric collision detection solutions just haven’t been reliable. Most providers don’t offer insurers collision detection technology that’s built on billions of miles of driving data and hundreds of thousands of verified collisions.
According to The Zebra, there’s also insufficient data in general about some driver safety technology. They note that a recent AAA survey “concluded that a greater understanding of how drivers perceive and use advanced vehicle [safety] technology is needed for successful broad implementation.”
When it comes to collision detection technology, auto insurers, and tech providers have not focused enough on business model innovation. Insurers have long been running usage-based insurance (UBI) programs using the same technology, and collecting and using driving behavior data in the same ways they’ve been doing for years. In that sense, data has become siloed.
At the same time, many tech providers still charge per MAU, regardless of the use case. This makes collision detection impracticable.
As Insurance Business Magazine reported earlier this year, UBI has a 5% market penetration but 85% of millennials say they’re interested in these programs. It's time for tech providers to provide more flexible solutions that can be applied to multiple use cases, and for insurers to start getting more creative with driving behavior data, using Mobility Risk Intelligence (MRI) more holistically.
There’s no cookie-cutter, one-size-fits-all approach to scaling collision detection solutions. However, as the digital sentinel race between big tech and auto insurers ensues, below are the important factors that insurers should look out for in a tech provider.
Insurers should work with tech providers that are flexible, helping insurers build a collision detection solution that makes sense for them. This means that tech providers need to make data available to insurers in a way that they can get insights in the right place, at the right time.
Whether it’s collision detection, location data, or driving behavior data, tech providers should help insurers ingest this data for different purposes and use cases without them being charged for each use case. That will help auto insurers scale these solutions across their entire book of business.
Insurers should work with tech partners that offer reliable, AI- and MI-based solutions. Zendrive’s MRI platform, for example, was built on billions of miles of driving data and hundreds of thousands of verified collisions.
Insurers should partner with providers like Zendrive which can create a win-win-win scenario for all those involved.
According to PropertyCasualty360, which sourced data from the National Association of Insurance Commissioners, “Nearly 70% of all consumer complaints submitted to the ten largest U.S. home and auto insurers involve claims.”
In a win-win-win scenario, insurers get the data they need to improve these claims experiences, policyholders get free access to this driving safety feature and benefit from these smoother claims processes, and, in working with this data, tech providers are able to make its algorithms stronger – and, more importantly, roads safer – over time.
For insurers, a final important ingredient for success and differentiation in scaling effective collision detection solutions is to think proactively. Are they asking the right questions like whether they are delivering memorable experiences for policyholders in stressful situations, or whether they should be measuring success with other KPIs (i.e., how many lives they saved in a given year)?
Asking the right questions, coupled with choosing a strong, innovative technology partner, will ultimately lead insurers to safer, more scalable collision detection solutions.