Ask the average driver what he or she knows about connected cars or telematics, they’ll likely say they’ve seen the OnStar or Progressive Insurance commercials. Telematics continues to evolve, and has seen tremendous growth in business models, technology and programs use in the insurance and commercial fleet industries with applications ranging from underwriting, claims, and fraud to accident management, driver safety and behavioral modification.

Early – though still prevalent – telematics programs rely on a small communications device connected to the vehicle on-board diagnostic (OBD) port. The proliferation of smartphones, however, has enabled the elimination of these device costs and provided more convenient mobile solutions. Car makers have also started installing software and communications technology in new model vehicles which further simplifies the user experience and expands program capabilities, integrating them into dashboard screen interfaces.

More than 90 percent of new cars will transmit telematics data by 2020, according to the Auto Care Association. But where is this data going? Industry information providers have introduced Telematics Data Exchanges (TDEs) which consolidate drive and vehicle data from a variety of car makers and provide insurers with uniform, normalized data.

I recently partnered with Stephen Applebaum, Managing Partner, Insurance Solutions Group & Senior Advisor, AtoneRidge Advisors, LLC, to write Connected Car Data: Moving Past the Hype – excerpted below – for Insurance Thought Leadership.

For more information on LexisNexis Risk Solutions and how our Telematics Data Exchange can work for you, check out our Telematics resources.

Excerpted with permission of Insurance Thought Leadership, Inc.


The emergence of InsurTechs, with their innovative application of new technologies to solve age-old insurance challenges, along with the implied threat of those solutions to traditional insurers has dramatically changed the way insurance executives think about partnerships.  Today, strategic technology-centered partnerships are enabling insurers to transform their core processes and expand into more markets than ever before. In fact, many of the largest carriers have formed or joined dedicated insurtech venture capital investment funds and accelerators, whose portfolios potentially represent a double win, financially and in process improvement.

In the area of the Internet of Things, of which Connected Car is a major subset, inter-industry partnerships and alliances are critical – indeed mandatory – to success. Even one-time competitors are seen to collaborate where both parties do better together than separately.

Partnerships between ecosystem participants are inevitable, and desirable – with each segment leveraging its core strengths and expertise in support of mutual business objectives and their common customers.  In the case of Connected Cars those are the owners, drivers and passenger as well as the policyholders.


By focusing on the common customer, each participating segment partner can “win”, defined as achieving their primary strategic objectives.  In the case of auto insurers, it means improving and strengthening the customer experience and relationship while improving underwriting and operating results. For car makers, it means lowering the Total Cost of Ownership for car buyers – a fundamental strategic objective that has recently emerged – and reinforcing brand loyalty with car buyers and owners.  Furthermore, lowering total cost of ownership is a strategic objective that auto insurers embrace as well.

For intermediaries such as TSPs and TDEs, it means adding significate value to existing relationships with insurance company clients and adding new customer segments and product revenue streams to their businesses while lifting and reinforcing brand recognition across all segments.

And let’s not forget one more important reality – every Connected Car program, regardless of the participants, requires acceptance by the same common customer.