For more than a decade, insurers sought to gather drivers' data to optimize, tweak and adjust policies by creating real-time data sets based on how people behave behind the wheel.
Next, they're taking it a step further.
Eventually, the Progressive ($PGR) Snapshot plug-in telematics device, which was launched in 2008, will be a thing of the past. Increasingly, insurers are going to gather more data from consumers through a very reliable source: their phones.
Liberty Mutual ($PRIVATE:LIBERTYMUTUAL) may think the way to do this isn't to launch another app of its own - instead, it's partnering with a big automaker, with a huge established base of app users.
Earlier in March, insurer Liberty Mutual and automaker Ford ($F) announced a connected vehicle insurance partnership, through which Liberty Mutual would offer insurance discounts to drivers that participate in its Mobility Initiative. The telematics program eliminated plug-in devices, instead allowing Liberty Mutual to track drivers via the FordPass Connect App.
And, that partnership translated to immediate and substantial scale for Liberty Mutual over other insurers. Over the space of a little more than two years' time, FordPass accumulated more than 123,000 reviews in the Apple Store. Thinknum Alternative Data tracks reviews submitted in the Apple ($AAPL) Store, which can serve as a proxy on consumer engagement.
At least this kind of data-sharing relationship is symbiotic. Consumers who participate in most data-sharing programs with insurers are swapping their information in exchange for a better rate on their auto insurance - provided they obey the rules of the road, that is. Liberty Mutual and Progressive are far from the only legacy digital disruptors in the insurance business - and most of them are trying to emulate Allstate's success.
Allstate’s Drivewise program is about a decade old, and once utilized a plug-in device to track driver behavior just like Progressive. But even Allstate faced challenges drawing drivers to the platform. Thinknum Alternative Data reflects that as early as 2015, it sought to get consumers into an app separate from its flagship product, but it gained little traction with consumers in Google Play and Apple stores.
Today, Drivewise has been integrated into the Allstate app - which has developed substantial traction with users in a way that any other major American insurer would envy. Allstate is an insurance industry leader within the Apple Store, having earned nearly 370,000 ratings in about two years' time.
“[C]ustomer needs are changing due to increased conductivity and advanced analytics. Our leading positions in telematics and digital auto collision estimates are two examples of how we're embracing these changes.” - Allstate CEO Tom Wilson, February 2020 earnings call
Geico has earned more reviews in the Apple Store than Ford and Allstate combined - but the insurer that’s part of Warren Buffett’s global conglomerate is a laggard when it comes to tracking driver data, and only launched a telematics initiative, called DriveEasy, in the second half of 2019. Others - Nationwide and Farmer's telematics apps among them - have engaged far fewer reviews on primary smartphone platforms, a signal of lower engagement.
And because insurers are increasingly eager to get into users' handsets, it's worth considering what else they think they need to know about you - and how the data is used. Insurers' apps, and automakers' apps, are bound to gather data from consumers' phones - but increasingly, data collection and utilization processes have earned regulators' ire.
New York, according to Bloomberg Quint, made insurers stop using education level or job status as a factor for determining rates; in California, a state regulator last year required companies from using gender as a factor.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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