Hype surrounding the connected car continues to grow
There are a plethora of stories out there about connected cars, autonomous cars and telematics. After the 2016 Consumer Electronics Show, there is no doubt the interest in connected cars is at an all-time high. Manufacturers are rolling out cars with new connected capabilities and digital services daily, and offering opt-in connected servicing with remote diagnostics. Consumers – initially a bit hesitant about security and “big brother” ramifications – are embracing the phenomenon. Factors such as the rapid advances in computing power have given rise to connected vehicle innovation.
People spend a lot of time in their cars. We use them for work and play. A study in April 2015 by the AAA Foundation for Traffic Safety and the Urban Institute indicated that on average, Americans drive 29.2 miles per day, rising to 30.6 miles daily during the summer. We love our cars, and we enjoy driving. That being said, the idea of a connected car extending to life beyond the vehicle is appealing to many, and connected cars present a plethora of opportunities for multiple businesses. Equipped with an internet connection, mobile applications and more, connected cars allow drivers to interact with their environment and utilities to service a new landscape.
According to a recent report from BI Intelligence:
• More than 380 million connected cars will be on the road by 2021. The market has seen a significant increase in automakers’ plans to connect the majority of the vehicles they sell and, as a result, we’ve increased our 2015 forecast.
• Automakers are connecting the vehicles they sell because the connection offers clear business opportunities.
• Consumers are adopting the connected car faster than expected. We identify the three factors that causing the increase in demand.
• Technology companies will play a major role in the future of the automotive market. The big question is whether tech companies will eventually manufacture cars.
• Fully autonomous cars are only a few years away. Technological, regulatory and consumer adoption hurdles still remain, but there have been many strides toward a car that can drive itself from point A to point B with little to no human interaction.
Connecting your life
Connecting your car is essentially an extension of your connected life. The “internet of things” allows all things to be connected and our cars are no different. So what does the connected car life look like and what role will insurance play in this pivot?
Essentially, connected cars are sharing valuable information for drivers that can help not only improve road safety, but increase the value and lifetime of a vehicle, enhance the overall driving experience and allow drivers to connect to – and protect – many other elements of their lives, right from their vehicle. As a result, insurance companies will see fewer accidents or incidents, and their business model must adapt. They will need to offer more personalized services and products geared toward the individual – which is an entirely new way of thinking for this industry. As a result, consumers will interact with their agencies on a more regular basis than in the past – when interactions were pretty limited to the time they start a policy and any time an incident occurred. Now, insurance companies can regularly interact with consumers based on the data they are receiving from connected cars – offering additional incentives, rewarding good driving behavior and more.
Beyond the technology advances, there is still one factor that has moved the needle most: the consumers and their response to the IoT.
IoT and the consumer
The IoT has changed the world as we know it. As consumers, we expect to be connected to our “things” whenever, wherever and however we see fit. The smartphone is an appendage that connects us to things around the globe. Like Steve Austin, we feel we’re “better, stronger, faster” with our smartphones. We now use wearables to monitor our bodies to ensure that we are healthy. Our home thermostats and lights are controlled remotely to ensure our comfort and to optimize efficiency. The way we shop, pay bills, go to school and work have become connected – suffice to say, connected is the new normal, so we expect our cars to be connected things, too.
Auto manufacturers embrace the opportunities IoT provides to meet the connected customer’s unmet needs. Beyond the current in-vehicle infotainment features – such as streaming a Spotify playlist to your car – and convenience options, like navigation systems, auto manufacturers also see potential to make the roads a safer place by releasing vehicle safety systems that allow vehicle-to-vehicle and vehicle-to-infrastructure connections to avoid crashes and reduce severity. According to the Department of Transportation, V2V and V2I applications notify drivers of “roadway hazards and dangerous situations that they can’t see through driver advisories, driver warnings, and vehicle and/or infrastructure controls.”
To the manufacturer, a connected vehicle and IoT is not only a means of creating a safer vehicle or a response to consumer need; connectivity also gives them the ability to manage the customer relationship and create additional revenue streams. Ultimately, these two work in harmony to create a more loyal service customer and increase brand consideration when it comes time to purchase a new vehicle.
Benefits
In addition to insurance incentives and improved customer service, the connected car benefits consumers in many ways:
Personalized driving experience
From improved mapping data, in-vehicle Wi-Fi or local area network hot spots, smartphone interfaces, weather alerts and traffic conditions, the connected car is truly focused on individual drivers and their journeys.
Road safety
Connected cars can alert drivers to road closures, detours and conditions with enough advanced warning to avoid unpleasant trips. They also can automatically sense and prevent potential collisions based on external factors, as well as recognition of the driver’s behaviors. Emergency call functions are built-in and eventually connected cars also will be able to monitor and assess a driver’s health and awareness – avoiding fatigue-based crashes, for example.
Crash and claims
Speaking of crashes, connected cars have the ability to immediately recognize a crash, allowing insurance companies to rapidly react to an accident moments after it has happened, so that contact can be made with the policyholder in a proactive way (outbound vs. inbound). The objective is to collect as much information as possible and “freeze” the crash scene. First Notice of Loss data is immediately sent to insurance companies, allowing them to process the claim more efficiently for the consumer as well as immediately send a rental car while towing away the damaged vehicle. Overall, consumers will experience less headache and improved customer service from insurance companies in the event of a crash, as they act as a true a partner instead of a commodity provider. Touching base at the first moment of a crash also can help avoid fraud attempts and third-party interferences.
Vehicle diagnostics and service
Fuel efficiency, maintenance needs, tire and brake health, fluid alerts and more are taken to a new level with telematics. Connected cars can alert drivers to regular maintenance needs and tie in to a services plan with preferred dealers, creating an appointment with just one touch of a screen. Dealers can carry out remote diagnostics through the vehicle in advance of a visit, decreasing customer wait time in-house, and increasing the efficiency of service.
V2E
Dubbed “vehicle-to-everything” by automotive supplier Delphi, V2E can enable drivers to connect with just about everything else in their lives, including family, friends, home and office. Voice commands and hands-free controls allow drivers to remotely control not only their car, but also items in the home such as an alarm system, lighting, garage door or HVAC system. Imagine you’re driving home from a long holiday trip, it’s snowing and you ask the car to turn on the driveway lights and home heat so the house is warm when you arrive.
The connected car truly is part of the burgeoning IoT phenomenon, presenting unprecedented new business revenue opportunities for companies across the insurance, automotive, mobile and telco industries.
Nino Tarantino has been developing Octo’s business in North America and has more than two decades of experience in the global telecommunications industry building startups and developing strategic business operations. As CEO of Acotel USA/Flycell, Tarantino launched the first mobile premium messaging and consumer content services in North America. Prior to Acotel, he served as VP of business development for Anoto/Ericsson where he developed the U.S. market for the company’s revolutionary communication technology. Tarantino also led the global business development effort for Iridium/Motorola, establishing partnerships with wireless operators and resellers worldwide and held several product and business development positions within Telecom Italia Group. He received his MS from the University La Sapienza in Rome, Italy.
Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
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