Meet an insurtech bridging the gap between automakers and insurers
With so much interest from insurers in connected-car data, alliances between automakers and insurtechs are becoming more common throughout the industry so that the data holders can provide actionable information to carriers.
The insurtech Otonomo launched in late 2015 and currently holds 10 data exchange partnerships with carriers in the U.S., Europe and Japan. The Israeli-based company also works with nine automobile manufacturers, including BMW and Daimler AG, monetizing data and selling it to carriers for usage-based insurance services.
“Many [insurers] have come back looking to figure out other data use cases that add value for their customers,” said Ben Volkow, CEO and co-founder of Otonomo. Volkow declined to share the insurance providers Otonomo has active relationships with. However, he says the company plans to make announcements in the coming months.
Otonomo’s cloud-based platform extracts anywhere from 20 to 500 data points from a vehicle depending on the model, he added. These include car temperature, engine quality, braking, speed and what drivers listen to on the radio. Revenue earned off sold driver information is shared with carmakers, the company says. The startup has raised $40 million in venture capital funding so far, highlighted by a $25 million Series B round in April.
“Every car manufacturer is different. So when we get the data, it’s raw,” said Volkow. “We normalize it to one language and package it the way the insurer requests it.”
Similar to insurance companies and OEMs, customer privacy is a chief concern for Otonomo. The startup built a privacy firewall into its platform designed to redact information drivers have not allowed third parties to see. It also took autonomous vehicles into account when developing its software early on.
According to Volkow, both Otonomo and its insurance partners will have to reconfigure their respective businesses when driverless cars arrive. Insurers have to figure out what risk to price—whether it be the number of people in a car, mileage, location or the AI technology itself. Meanwhile, Otonomo has to deal with what is expected to be 4000 GB of driving data every day. But Volkow is confident his company is ready for it.
“Data is the new currency,” said Volkow.