In the future this will all be...

Ever wondered what is going to happen in the next few years or beyond that? Well, with my digital crystal ball I’ve come up with a thought or two on where things are headed.

1. The future is going to contain more technology.
It’s going to be faster in its processing (and therefore seemingly more ‘clever’), more usable and even more ubiquitous than it currently is. However (because of this and other factors) it is also going to be more complicated and connected, meaning that even the word we live in now will seem like a pre-industrial medieval state in just a decade or two.
From clothing embedded with NFC chips costing only a few pence that tell you they’ve been at the bottom of the washing basket for over a week, all the way through to comparison websites that automatically compare the information from that telematics insurance box now built into your hybrid electric car.

2. Data is going to be the most valuable currency
We already know that the huge valuations of online services such as Google and Facebook are not just because they have great functionality (such as to link us to our friends & old colleagues) or a great way of finding stuff…  but because they collect, use and continue to build up data on individuals and their habits, preferences, friends and what they had for breakfast. Amplify this fact by an increased population which is online more often via more devices, collecting even more data and you really start to understand how (after water and  perhaps actual currency) data is going to be the most valuable commodity there is.
I’m not suggesting you will always be able to pay for a bottle of water in a street café by giving them your date of birth… but is it that hard to imagine a time when you will be able to use your Starbucks loyalty card to get a free bottle of water in return for signing-up for their new improved reward programme, which just needs to know one piece of information…. Your birthday??

Big data and telematics insurance challenge

In my research on the development of the telematics and the insurance industry  I have realised that my slide and previous post on the maturity of the aggregators needs to change. This is caused by the addition of data..... Big data!

As premiums get more specific to the individual driving behaviour and more data is collected on each policy holder, there are questions that I've got:

1. If I want to have access to all the data about my driving behaviour, can I?
2. How much data is this and how do I get it & store it?
3. How do I provide this data to another potential insurer to be able to compare their premium?
4. How would I then provide it to several insurers at the same time as part of an aggregate service and are they able to produce comparable policies?

So far there doesn't seem to be any easy way of taking one set of telematics driving data and moving it across to another company. Surely this will become of more and more concern to drivers and also to the people that set legal policy & regulations? So if the Data Commissioner's office and even the financial service regulation bodies are not taking an obvious interest, you can be pretty sure they will do soon.

In the end, telematics does not become an issue about creating a comparable policy from insurer to insurer, it is about the bigger issue of how user data is collected, where and who stores it, who has access to it (with and without the insurers permission) and what eventual use this is put to.

Will telematics save us from aggregators?

If you read my earlier postings on telematics (otherwise known as 'black box' or GPS car insurance) and the recent post on the new insurance aggregation service provided by Google, you may have combined these two things. You may have then, like me, asked how motor insurance comparison will work for those who opt for a little electronic box in the boot of their car.

In theory, telematics should give more personalised insurance premiums, as more data is collected and more relevant policies are created for each driver. The technology is used already in Brazil, South Africa and now also Australia, which have all apparently seen reductions in road deaths as a consequence.

UK insurers are starting to get more interested in telematics and so is Go Compare, one of the UK's leading aggregators. Go Compare initially approached telematics provider Wunelli to work on a 'black box comparison site' to understand more about telematics products. This led to Wunelli spending six months developing Compare the Box's price and product comparison facility.
http://www.comparethebox.com/

So far each insurer is compared using a number of a number of factors, including the location of the car and time driven (some charge extra for late night driving), but also other more detailed information such as acceleration, braking & cornering.

Back in April 2012, Compare the Box was the only telematics insurance aggregation website. But if the history of the web has told us anything, it is that when something unique and successful is developed..... a number of other similar services rush into this space very quickly.