Unlocking the Value of Connected Car Data: Opportunities for Insurers Beyond Motor Coverage

The automotive and insurance industries are undergoing a profound transformation, driven by the explosion of connected car data. As vehicles become rolling digital platforms, the data they generate is emerging as a strategic asset—one that extends far beyond traditional motor insurance. For insurers, this shift represents a unique opportunity to create new value propositions, diversify into adjacent lines such as home, health, and SME insurance, and power innovative cross-industry partnerships. The future belongs to those who can harness this data to build customer-centric, data-driven ecosystems.

The Expanding Value of Connected Car Data

Modern vehicles are equipped with a sophisticated array of sensors, telematics, and software that continuously collect data on driving behavior, vehicle health, location, and usage patterns. While early efforts to monetize this data focused on subscription-based services—such as remote start, navigation, and entertainment—the true potential lies in leveraging connected car data to create scalable, cross-industry business models.

Beyond Motor Insurance: New Frontiers for Insurers

1. Usage-Based and Dynamic Insurance
Usage-based insurance (UBI) is already transforming motor coverage by enabling personalized premiums based on real driving behavior. But the same data can be extended to:

Home insurance: Connected vehicles can detect when a home is unoccupied, triggering smart home security features or adjusting risk profiles for theft and fire.
Health insurance: Driving data can provide insights into lifestyle and wellness, supporting proactive health interventions or tailored health coverage.
SME insurance: For small businesses with fleets, telematics data can inform risk management, optimize routes, and enable dynamic, usage-based commercial vehicle insurance.

2. Aftersales and Predictive Maintenance
Real-time sensor data enables predictive maintenance, allowing insurers and OEMs to anticipate service needs before breakdowns occur. This not only enhances safety and customer satisfaction but also drives aftersales revenue and reduces claims frequency and severity. In-car service marketplaces can recommend tailored services, upgrades, or promotions based on usage patterns and trip context.

3. Cross-Industry Partnerships
Connected car data is a catalyst for collaboration across industries:

Utilities and EV ecosystems: Data can optimize charging schedules, enable dynamic pricing, and facilitate bundled energy and mobility services.
Finance: Vehicle location and usage data can inform asset recovery, warranty offerings, and even credit risk assessments.
Smart cities: Aggregated, anonymized vehicle data can support urban planning, traffic optimization, and public safety initiatives.

Building Data-Driven Ecosystems: Practical Steps for Insurers

To unlock the full value of connected car data, insurers must move from isolated technology initiatives to building integrated, cross-industry ecosystems. Key steps include:

Invest in Telematics and Data Infrastructure: Robust platforms are essential for collecting, processing, and securing vehicle data. Over-the-air updates, advanced analytics, and machine learning enable new features and predictive services at scale.
Develop Contextual and Predictive Services: By analyzing real-time and historical data, insurers can offer contextual services—such as location-based offers, dynamic insurance, or tailored content—that enhance the customer experience and open new revenue streams.
Forge Strategic Partnerships: Collaboration is essential. Insurers should seek partnerships with OEMs, utilities, aftersales providers, and fintechs to co-create value-added services. These partnerships can be structured around data sharing, joint product development, or integrated customer journeys.
Create Data Marketplaces with Standardization: For data marketplaces to succeed, insurers and partners must address challenges around data quality, standardization, and interoperability. Establishing common data formats and APIs, and working with industry consortia, will be critical.
Prioritize Consumer Privacy and Trust: As vehicles become data-rich platforms, consumer trust is paramount. Insurers must implement transparent data governance, obtain clear consent, and provide customers with control over their data. Privacy-by-design principles and compliance with evolving regulations are non-negotiable.

Overcoming Challenges: Privacy, Standardization, and Collaboration

While the opportunities are vast, several challenges must be addressed:

Consumer Privacy: Customers are increasingly aware of how their data is used. Transparency, opt-in mechanisms, and robust data protection are essential to build and maintain trust.
Data Standardization: The lack of standardized data formats and interfaces can hinder ecosystem development. Industry-wide collaboration on standards is essential to unlock the full value of data sharing and marketplace models.
Cross-Industry Collaboration: Building a connected ecosystem requires new operating models, shared incentives, and a willingness to collaborate across traditional industry boundaries. Insurers must adopt a platform mindset, enabling partners to innovate on top of their data and services.

Real-World Impact: Data-Powered Innovation in Insurance and Beyond

Usage-Based Insurance: Leading OEMs and insurers have partnered to offer UBI, leveraging telematics to personalize premiums and coverage. Some, like Tesla, have developed their own insurance products, while others bundle insurance with vehicle subscriptions or EV services.
Predictive Maintenance: OEMs and insurers are using sensor data to predict service needs, automatically ordering parts and scheduling appointments, reducing downtime and enhancing customer loyalty. This approach is being extended to fleet operators, where predictive maintenance minimizes costly breakdowns and optimizes vehicle utilization.
EV Charging Collaborations: Automakers are partnering with utilities and third-party charging networks to create seamless charging experiences, dynamic pricing, and even peer-to-peer charging solutions. These collaborations are essential to overcoming range anxiety and accelerating EV adoption.
SME Insurance Transformation: Insurers are leveraging connected data to offer trade-personalized digital experiences and coverages for SMEs, automating underwriting, and embedding insurance at the point of need—such as when purchasing a vehicle or adding a new business asset.

The Road Ahead: From Technology to Tangible Business Outcomes

The next decade will be pivotal for insurers seeking to transition from product-centric to data-driven, service-oriented businesses. Those who act now—by investing in telematics, forging ecosystem partnerships, and prioritizing data governance—will be best positioned to unlock new revenue streams, enhance customer loyalty, and shape the future of insurance.

Connected car data is not just a technological asset; it is the foundation for a new era of insurance value creation. By moving beyond motor coverage and embracing ecosystem thinking, insurers can realize the full potential of connected services—for themselves, their partners, and their customers.

Ready to unlock the value of connected car data? Publicis Sapient’s expertise in digital transformation and ecosystem building can help insurers lead the way in this new era.