Doorway to a new era in automotive insurance

The responsible handling and sharing of data and the question of data ownership have been topics of debate for many years already, but in recent times, they have been particularly debated in the European automotive industry, where a coalition of parties including insurers, leasing companies, and repair shops have been lobbying the European Commission to intervene when it comes to accessing valuable vehicle data. Connected vehicles already churn out several terabytes of data per day, but this is nothing compared to what’s to come – an estimated 30 terabytes of data per day by 20251. This is the data equivalent of over 7,000 high-definition movies2! In today’s cars, hundreds of high-tech sensors record everything from driving behavior to fuel consumption and seatbelt status. Until recently, car manufacturers have been the gatekeepers of this data gold mine, but the new EU Data Act will be a game changer, putting car owners back in the driver’s seat when it comes to who accesses their vehicles' data. “This move is an important first step in order to enhance data sharing and competition, and for us as insurers to be able to implement new and improved products, claims processes, and effective prevention measures for our customers,” says Christoph Lauterwasser, Managing Director of the Allianz Center for Technology. “We are about to enter a new era in the world of automotive insurance and solutions, thanks to the power of data from connected cars.” With an expected 177 million connected vehicles in the EU by 2030, the extent of the “big” in big data becomes apparent.

From the insurance perspective, access to and targeted use of vehicle data opens up new possibilities and the potential for new quality standards in the processing of motor vehicle claims. “Each step in the claims process can be made more efficient, whether it’s registering the damage, providing immediate assistance to the customer, calculating the amount of the claim, selecting suitable service providers and workshops, or settling the claim correctly and quickly,” says Lucie Bakker, Chief Claims Officer at Allianz Versicherungs-AG

Imagine the scenario: it’s the end of your working day, and after a long commute, you’re sitting at the last turnoff before home, tapping your fingers on the wheel in time to the radio. You’re already thinking of your sofa and the next episode of that mini-series you’re watching, when out of the blue, another vehicle runs into you from behind, sending you crashing into the car in front. The harsh crunch of metal sounds over the steady whishing of the wipers as they work against the evening rain, and you can’t believe your bad luck. As you pull away from the tooting horns to a safe spot at the side of the road, you notice valuable witnesses edging away from the chaos, and you are filled with a sense of unease – how will you prove you didn’t hit the front car first? As you ponder your next move, your phone starts to ring. It’s Allianz; in-vehicle sensors have told us you’ve had a collision, and we’re calling to tell you what to do next. What’s more, you won’t have to worry about those reluctant witnesses fleeing the scene; there will be no doubt as to the sequence of events – it’s all in the data. 

This is just one example of data transforming the way we as insurers will serve and interact with our customers, but there are endless new use cases that will impact car owners and insurers alike. In the case of reselling a used electric vehicle, kilometer count is yesterday and battery data is the new black. “The market for second-hand electric vehicles hasn’t really taken off, partly down to the fact that all-important battery data is often missing,” says Frank Sommerfeld, CEO Allianz Versicherungs-AG. “Knowing the exact condition – and therefore the value of the battery – is crucial for anyone looking to buy or sell an electric vehicle. Access to data logs from batteries will make accurate data-based decisions possible.” This data is not only critical for sales, but also for the handling of accident damage claims. Access to battery data can result in repair cost reductions and subsequently improved type classes and more affordable insurance premiums. As for the sustainability impacts of such data – these go without saying; driving a repair and replace philosophy is only possible if we can accurately assess the condition of the most valuable parts. But there are also upsides in terms of safety and prevention; specially designed in-vehicle sensors could monitor the condition of the battery and transmit a warning signal to a driver’s phone in case of fire risk, averting disaster before it happens. And that’s just in the case of battery data. “Imagine a world in which the insurer acts as an invisible guardian angel to drivers, warning them of upcoming weather hazards or accident hotspots to avoid. This is all possible by linking their cars to our own high-quality databases, built from our vast experience in claims,” says Lauterwasser.

With the European Data Act set to clear up ownership of connected-car data and put owners back in the driver’s seat when it comes to who can access it, life on the road is about to change, and insurance customers can expect to benefit from new and improved services and support. Data from vehicle keys will become paramount in solving thefts, driving-habit data will make taking out insurance policies easier (and the rates fairer), and analysis of accident research data will serve to improve road safety and prevent damage from happening in the first place. For the first time, car owners will have the possibility to access their own data and share it in real time with those they choose. But data is also private... with connected cars sometimes knowing their drivers better than they know themselves, will consumers choose to share?

As part of this year’s Motor Day, Allianz conducted a survey of European motorists on the subject of vehicle data. One in two respondents is willing to make their data available for insurance services, every second driver fears data misuse, and three quarters of respondents demand clear deletion procedures. All in all, the survey revealed a rather low level of understanding amongst consumers of the modern world of data in our cars. While the fear of data misuse and loss of privacy is palpable, the survey demonstrated an understanding amongst motorists that benefits can be derived from data, in particular for innovative services (55% of respondents approve), rapid processing of accidents (60% approve), and blame clarification in the case of accidents (65% approve)³. “The results of this survey are exactly what drive us as an insurer,” says Klaus-Peter Roehler, member of the Allianz SE Board of Management. “The concerns about data misuse are understandable in view of increasing cybercrime, but as an insurer of cyber risks, we know these dangers and have the expertise to deal with them. An opportunity, and indeed a necessity, has presented itself; we have to convince customers that sharing data with us is not only safe, but to their benefit.”
Experts estimate that today, around 80 percent of industrial data in Europe remains unused. The new EU Data Act is a step in the right direction if we are to harness the economic power of this data, but it is not tailored to the needs of the automotive industry, and further industry-specific legislation will be needed to cover the complexities of the sector. “The EU Data Act is comparable to the sketch of a treasure map,” says Klaus-Peter Roehler. “We know where the trove lies, but more detailed directions are required to help us unearth it.” In the case of connected cars, a number of uncertainties still exist regarding the implementation of the new Data Act. For example, it stipulates that “easily accessible” data must be transmitted in real time – but which data is that? And what price can car manufacturers charge for the transmission? Real competition can only emerge if costs remain fair. Otherwise, third parties have no chance to innovate. These are all topics that must be addressed, in addition to technical challenges related to data storage and bandwidth, as well as the updates car manufacturers will have to make to components to allow relevant data to be collected and shared. “Allianz will continue making the case for a transparent and regulated marketplace characterized by fair prices that allow all to benefit,” says Roehler.

Big data architecture for connected vehicles: Feedback and application examples from an automotive group (sciencedirectassets.com)

How Much Internet Data Do You Need? | HighSpeedInternet.com

3. Average approval rates from 2023 online survey of 5200 drivers in Germany, Italy, France, UK and Spain, conducted by the Allianz market research institute DrivenBy, the Allianz Center for Technology (AZT), and the market research company Ipsos.

On October 17, 2023, the 11th edition of the Allianz Motor Day took place in Ismaning, Germany. The event explored the implications of the much-awaited European Data Act, including the positive changes that access to connected-car data could bring for customers and insurers alike.
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Allianz Motor Day 2022: Allianz calls for green repairs
Allianz survey: High level of approval for data use in accident investigation
The Allianz Group is one of the world's leading insurers and asset managers with around 125 million* private and corporate customers in nearly 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 737 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.7 trillion euros** of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2023, over 157,000 employees achieved total business volume of 161.7 billion euros and an operating profit of 14.7 billion euros for the group.
* Including non-consolidated entities with Allianz customers.
** As of December 31, 2023.
As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:
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