Allstate's creation of Arity, a data-science unit focused on the data from connected car technology, is based on the company's view that inefficiencies in the company's transportation system are on the way out.

Tom Wilson, Allstate CEO, said in the company's third-quarter earnings call, that the current American tendency toward having an individual car transport one individual is being disrupted by technology and could change.

"We think the personal transportation industry is going to change dramatically and we think that's an opportunity for us to do more for our customers," Wilson said in remarks transcribed by Seeking Alpha. "We have about $4 trillion tied up in hardware called cars and trucks and stuff like that. Capacity utilization is in the – even at peak hours is in the 30%, 34% range and there's one person in the car. A 20% improvement in the efficiency of that system would be a 5% increase in household income in America."

There lots of potential innovations coming in personal transportation, Wilson adds. And from car-sharing to more optimized stoplights to improve traffic flow, many of them are tied to the data coming from individual cars. Arity is devoted to understanding that data not just to improve the insurance cost structure, but to provide value-added services as well, Wilson continues.

"We've taken it beyond pricing to include things like improving the driving experience," he says. "So adding applications on to our continuous connection to help those customers have a better driving experience, and then also to use that technology for other things."

As for whether Arity innovations will be translated across insurance, Wilson says, "We'll do it for non-insurance companies, and we will also do it for other insurance companies as well. So we think it's a platform where we will all be stronger because we are together without giving up our competitive ability to price with our own data in the marketplace."

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