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Insurance Telematics USA 2014

03/09/2014 - 04/09/2014, Radisson Aqua Blu, Chicago

Pricing Becomes a Commodity: Insurers Enhance the Consumer UBI Proposition by Integrating Complimentary Services for Product Differentiation

Telematics and consumer perception of the V2V driver interface

Stephanie Flores investigates what it will take to get consumers interested in vehicle-to-vehicle (V2V) capabilities

Typical American drivers aren’t familiar with industry buzzwords like “V2V”, yet they’re growing to expect the technology it brings. In response, automakers are growing their offerings of vehicle-to-vehicle safety features: forward-collision warnings, emergency brake lights and blind-spot warnings. The question for widespread deployment, however, is how much consumers are willing to pay and willing to give up in privacy.

“At some point, customers have started to expect it. These aren’t high-value items anymore. People value safety, and it’s not just for the rich,” says Raja Sengupta, an associate professor of civil and environmental engineering at UC Berkeley.

Researchers at Strategy Analytics found that consumers are interested in safety systems, but the amounts that they are willing to pay for them are similar across all systems—and tend to be low. For example, consumers would be willing to pay the same for blind spot detection as they would for night vision, which is a problem because night vision is more expensive to implement.

In search of buzz

Overall, consumers are demanding technology that’s safer, more accurate and unobtrusive to the driving experience, says Chris Schreiner, director of the User Experience Practice for Strategy Analytics. He recently surveyed consumers in the US, Western Europe, and China regarding their interest in V2V applications. Results showed that interest in those services is low compared to other advanced safety services, such as night vision and blind spot detection. “This is due to a lack of understanding and experience of what V2V can offer, and a lack of public buzz about V2V,” Schreiner says.

Companies such as Audi and Delphi touched on V2V at this year’s Consumer Electronics Show in Las Vegas, but it wasn’t a hot topic. “It seemed an afterthought to other connected services, such as smartphone integration,” Schreiner says.

Perhaps American automakers are taking their cues from the findings of CoCarX, a European technology project that focused on getting messages from vehicle to vehicle in a fast and flexible way. The project found that many V2X services could be carried out over the cellular network, allowing the widespread launch of services in a shorter time. One of the limitations of the study, however, was that it did not explore user perceptions. (For more on V2X and related technologies, see V2X telematics: Taking ADAS to the next level, Telematics and M2M communications: Creating the Internet of things, MEMS: The telematics opportunity and Telematics and enhanced consumer usability.)

In the US, the Department of Transportation is currently conducting Light Vehicle Driver Acceptance Clinics to explore what consumers are looking for in a V2V offering. The Federal Highway Administration is working with several partners, including the Virginia Tech Transportation Institute, Denso North America and a consortium of eight automakers.

Robust systems

In addition to the types of V2V safety features made available, automakers and their aftermarket partners must take care with how these features are presented to the user. The key with warnings is to find the balance between accuracy and the strength of the alert. “Just one or two false positives and users will dismiss the system, deactivate it if possible, and never use it again,” Schreiner says. “But it has to be sensitive enough so that it actually works when it has to.”

Another cost for consumers is that of privacy. For vehicles to communicate with one another, information must be given up. Sengupta says people will sacrifice privacy when two conditions exist: They get something of value in return and they trust the other party.

“The government is least suited to gain trust for fear of enforcement,” he says. For example, drivers might ask if the government would use V2V data to issue more tickets. It’s the car companies and their partners that can offer more value to the consumer, so trust is specifically a private-sector issue when it comes to this technology.

There are successful services out on the market now, such as the app Waze. It works because users are getting something immediate and tangible in return. It’s not only a game where the user accrues points, but also free navigation.

With location data, companies can say the data is anonymous, but it would easy to determine the location of a person’s home, work, and other frequently visited places. Privacy is a commodity and varies from region to region, Schreiner says. “Location-based mobile services are working because users opt-in and feel like they have control over their location data,” he says, “as they can choose which friends they share that information with.” 

Stephanie Flores is a regular contributor to TU.

For TU’s comprehensive coverage of V2V/V2X, see Special report: Telematics and V2V/V2X technologies.

For more all the latest telematics trends, check out Telematics Detroit 2012 on June 6-7, Insurance Telematics USA 2012 in September in Chicago, and Telematics Munich 2012 on October 29-30.

For exclusive telematics business analysis and insight, check out TU’s reports on In-Vehicle Smartphone Integration Report, Human Machine Interface Technologies and Smart Vehicle Technology: The Future of Insurance Telematics.

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Insurance Telematics USA 2014

03/09/2014 - 04/09/2014, Radisson Aqua Blu, Chicago

Pricing Becomes a Commodity: Insurers Enhance the Consumer UBI Proposition by Integrating Complimentary Services for Product Differentiation