Original Equipment Manufacturers (OEMs) in the automotive field have struggled for years to create revenue streams sufficient to offset the costs of implementing connected car technologies. Initial attempts to recoup these costs - primarily through subscription services failed to meet the acid test with car buyers. Most demonstrated their indifference by dropping services after free trials ended.
With consumers indicating a strong demand for connected car services, the challenge remains for OEMs to develop a business model that works effectively and justifies the manufacturing and operating expenses. There is a growing awareness among OEMs that the data captured during vehicle use providing insights to both the driver behavior and the vehicle status represents a largely untapped asset. IMS has deep expertise and proven experience with the essential technologies required to commercialize data for OEMs.
Process, manage, and secure data from the IoT
Apply "Big Data" analytics to create value
Commercialize insights derived from data
Secure Hosting: Ensuring secure data exchanges is integral to any data commercialization effort
Any areas in the data path that potentially allow intrusions or are vectors for abuse should be remediated to mitigate the risk.
Every byte of data about a vehicle and the driver operating that vehicle must be subject to full transparency and consent. The driver must be consistently informed of what data is being collected, how it will be used, how long it will be stored, who else will have access to it, and what prerogative does the driver or vehicle owner have for terminating consent given for the use of this data.
Tight Privacy Controls:
Data privacy is important both for legal and regulatory measures with which the OEM and any partners must comply, in addition to the basic business principle of respecting and protecting all information that relates to their customers. Failure to pay attention to data privacy could subject the OEM to fines or loss of their stature in the industry, as well as casting a dark shadow over the way that they are perceived by customers.
No Vehicle Integration:
Many different mechanisms exist for capturing and transmitting vehicle and driver data. The hardware and software supporting this effort should be factored into the plan for commercializing data. Of critical importance to any commercialization program is the capability of collecting, cleansing, normalizing, and unifying collected data so that irrespective of the OEM’s hardware decision, the vehicle and driving information is delivered to each beneficiary in a uniform, usable format.
Accurate, captured data is important and when Big Data analytics are applied - collected over millions of miles of vehicle operation and multitudes of driver decisions - this can open business opportunities and become a source of significant revenues. However, unless the scale of the revenues actively offsets the costs of implementing the technology, it becomes a losing proposition for automakers.
OEMs face numerous challenges in trying to implement a profitable strategy for vehicle connectivity and commercializing vehicle data, particularly because this entire area is essentially outside their range of experience.
Usage-Based Insurance (UBI) has become proven and it is becoming established in the marketplace. The accumulated knowledge and experience around UBI make it a low-risk starting point for data commercialization. As demonstrated by pilot projects and emerging programs, the true value of the data, through the insurance applications alone, can exceed the OEM’s monthly connected vehicle operating costs. The value of this data to the insurance industry, as supplied by OEMs, can be divided into three categories:
Event Data tends to be random and infrequent, but it offers higher value to the insurers. Event Data includes applications such as first notice of loss, accident scene management, and enhancements to the claims process.
Analytics Services involve the analysis of data and used by the insurer to understand the risk associated with the underwriting. These services are sometimes performed for a specific period, typically 6 to 12 months, and do not require the car to be connected for life. The value of this kind of analysis is to provide the insurer with the necessary information to make an informed and profitable underwriting decision.
Basic Data Applications often require the continuous collection of data. The data is used to detect fraud, create new insurance products, and provide discounts to drivers based on vehicle safety features, allowing insurers to compete using many of the advanced and emerging technologies available.
Key capabilities to look for in a prospective technology partner to bridge the divide between automakers and insurance carriers include:
IMS has deep expertise and proven experience with the essential technologies required to commercialize data for OEMs. The DriveSync® connected car platform developed by IMS for this purpose has successfully ingested and transformed data from multiple sources—including the unique data sets from each OEM—providing clean, consistent feeds of insights and generating value to multiple consumers of that data.
Partnering in the insurance sector is an excellent, low-risk way for OEMs to venture into the uses of Big Data to produce revenues. IMS is a market leader in this area with proven capabilities as a system integrator.
Because OEMs may change connected car hardware and software over the course of a model run, IMS stays current on these changes and adapts algorithms and data format conversions that correspond to the wide variety of OEM variations.
IMS excels at the complex operations required to extract intelligence from vehicular data, including acquiring and scrubbing data from the embedded OEM devices, normalizing the data to fit a consistent format, and applying analytics to meet the unique requirements of the insurance carrier.
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