Companies and regulators taking part in the automotive ecosystem tend to focus their autonomous-car strategies on a future state that's still decades away. But for insurance companies like Allstate, the ecosystem that's supporting driverless-car innovation can pay off in the short term.
Allstate is already leveraging the data and connectivity components that are feeding autonomous driving to make driving safer now through its DriveWise usage-based insurance program, CEO Tom Wilson asserts.
Wilson spoke on a panel, "Self-Driving Cars: The Future of Personal Transportation" at the Consumer Electronics Show in Las Vegas on Jan. 10. The discussion also featured Rick Snyder, governor of Michigan; Daniele Schillaci, EVP for Nissan; and Ya-Qin Zhang, president of Baidu. He says that while all efforts to improve the efficiency of personal transportation are noble, "we need to spend more time on the transition," not just the end state of a driverless future. That is where insurers are stepping in with digital interactions.
"We're using technology today to teach people driving in real time," Wilson says. "If you think about the way in which we have done driver education in the past, you did it once, and your [later] education moments were tickets which you attempted to avoid."
Now, DriveWise provides feedback to drivers that make them safer. That will be important as people continue to sit behind the wheel of the vast majority of cars for the next several years, Wilson says.
"So much of the investment is going into the hardware, but not a lot is going into how do we build consumer applications that make people be better drivers with today's cars," he points out.
That doesn't mean Allstate is ignoring what is coming, and its potential impact on the business. Wilson says the company has done "some scenario planning" where in three out of four cases, autonomous driving reduces insurance income. It's the outlying scenarios that are interesting, he notes, positing that in an autonomous world, personal mobility could become as ubiquitous as cell-phone usage has become over the past decade.
"As the cost goes down and the convenience goes up, will you visit your mother, for example, more than you do today?" he asks. "In that case insurance needs go up. It's interesting to think about if you move to a society where people are moving around a lot more because the barriers are lower."
While the industry is in transition, Wilson concludes, Allstate wants to be a participant. That's why it launched the subsidiary Arity to share its telematics data with other insurers and make the most out of the increased data coming in from cars, even though it doesn't make traditional business sense.
"As we change transportation, every other industry in the world changes as well -- it's like the microchip" in terms of impact, Wilson says. "It's about being open, being engaged and building business models that change over time."
