Special Advertising Section
Auto Market ‘Driven’
By Technology
Kevin Thompson,
ew: Kevin, how do you see technology
senior vice
impacting automobile insurance?
tHOMPsON: I see technology affecting automobile
president of B
est’s Revi
insurance in three different areas. The first is increased
insurance
analytic capabilities — the ability to analyze deeper and more granu-
services for ISO,
lar data to develop the various class plans and prospective loss-cost
evaluations needed for automobile insurance. The second area is
explains how vehicle-generated data — data actually collected from all the com-
21st century
puters and sensors within the vehicles themselves. A third area is
technology is
probably longer-term. It’s what I call smart cars and smart roads.
BR: How have increased analytic capabilities affected auto insurance?
changing both tHOMPsON: As technologies advanced and could handle more Kevin Thompson,
underwriting
sophisticated rating systems and sophisticated class plans, analysts
Senior Vice President of
Insurance Services
and claims.
devised classification systems to take advantage of the increased
computer power.
BR: Now, what about vehicle-generated data?
tHOMPsON: All of today’s vehicles have computers in them,
and there are multiple sensors that monitor the operations of vari-
“
Down the road,
we’re looking
ous systems. Today, we have technology for retrieving and analyzing
forward to more
that information. Down the road, we’re looking forward to more advanced ways
advanced ways to use the data to predict loss and streamline rating,
to use the data to
underwriting, and claims workflows.
predict loss and
BR: And what about so-called smart cars and smart roads?
tHOMPsON: For both vehicles and roads, there can be passive
streamline rating,
systems and active systems. A passive system provides information to
underwriting,
the car or driver but doesn’t take any action of its own. An active sys-
and claims
tem not only provides information but takes some action on the car workflows.
itself. For example, a smart road might be able to tell you there’s a red
”
light coming up so you can prepare to stop. It might tell you there’s
traffic congestion ahead so you can plan an alternate route. There are
also systems that warn you of things like vehicles on either side of you
within a certain distance. But those are passive. They’re just going to
let you know that you might want to take some kind of action. There
are also active systems being developed — smart cruise control is an
example. Set the cruise control, and the car itself will modulate its
speed depending on how close you are to other vehicles around you.
BR: So what is ISO doing in these areas?
tHOMPsON: In the analytics area, we’ve developed a number
Listen to the
of predictive models for use in automobile insurance. One of those
full interview
starts with the garaging address of the vehicle. It geocodes the
address and collects huge amounts of external data associated with
that location. The model analyzes the interactive effects of hundreds
of variables to make a prediction on the potential loss cost for that
vehicle. We’re also doing research to assess the predictive value of
vehicle-generated data. And we regularly monitor the issues sur-
rounding smart cars and smart roads — and how those issues affect
our industry. We modify our standardized insurance programs to
reflect changes in those areas.
BR
n For the complete audio interview, visit www.bestreview.com/tech09.html.
Best’s Review Special Section 91
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