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The connected carSean Carey, president, SCG Management Consultants
IBIS predictions • The connected car will change the claims and repair landscape forever• The component parts are there…But no one has put them together• New entrants will change the landscape• Claims still remains the red headed stepchild of the connected car• The new entrants are with us….Verisk, Apple, Google, OCTO• The pace of change has increased….technology compresses time• It’s not full autonomous it’s the journey…ADAS, mobility,
car share/hail….rapid change
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
Four years ago I presented at IBIS in Barcelona on a topic titled
Connected Car Connected Claim
It’s fair to say I was ‘out on a limb’, a little bit ‘out there’
Today the OEM and claims industry is consumed with talk about…
Connected Cars & Connected Claims
Why would the United Arab Emirates be interested…
It’s a global phenomenon
The connected car landscape
The connected car is connected to everything
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
The connected car marketSignificant and rapid growth – 45% CAGR
MM Units
BI Intelligence, 2015.
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
5 7 1525 30
55
85
2128
33
50
70
95
135
2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0
Active User Connected Car
MM Units
Technology Compresses Time
2017 2020
Technology Compresses Time
2017 2020
Technology compresses time
Advanced Driver Assistance Systems (ADAS)• Adaptive cruise control (ACC)
• Adaptive high beam
• Glare-free high beam and pixel light
• Adaptive light control: swivelling curve lights
• Automatic parking
• Automotive navigation system with typically GPS and TMC for providing up-to-date traffic information.
• Automotive night vision
• Blind spot monitor
• Collision avoidance system(Precrash system)
• Crosswind stabilization
• Cruise control
• Driver drowsiness detection
• Driver Monitoring System
• Electric vehicle warning sounds used in hybrids and plug-in electric vehicles
• Emergency driver assistant
• Forward Collision Warning
• Intersection assistant
• Hill descent control
• Intelligent speed adaptation or intelligent speed advice (ISA)
• Lane departure warning system
• Lane change assistance
• Parking sensor
• Pedestrian protection system
• Rain sensor
• Surround View system
• Traffic sign recognition
• Turning assistant
• Vehicular communication systems
• Wrong-way driving warning
What do the academics think?
Accident rate impact
80% Decline by 2040
29% Decline by 2020
29% Increase
2.5X Increase
Accident rate impact
The connected carFocused on safety, user-experience and data
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
Source: KMPG Self Driving Cars – Automobile Insurance in the Era of Autonomous Vehicles
Source: KMPG Self Driving Cars – Automobile Insurance in the Era of Autonomous Vehicles
The connected car
Telematics Driving Data
Open Exchange
UBI, Other
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
The early buds of MayToyota launches a new, US-based company combining telematics and insurance
Effects on workflow…It’s all about the consumer
Market – prevailing conditions
The claims/collision market is highly fragmented and somewhat dysfunctional
The insurers dominate the landscape & The MSO segment has grown to become a significant barometer of the industry
These dominant entities are forging ‘relationships’ that further accelerates the consolidation dynamic
The independent repair community is adrift & the Consumer is getting lost in all of this
Vehicle technology requires different repair methods and procedures creating a technical tsunami & there is a technology tsunami following closely behind
The OEMs are responding to market forces (its now about brand reputation)
Telematics and the connected car will change the market forever
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
So what if?
What if the car made the claim?
Constant Updated
Communications
Source images for illustrative purposes only
DATA CENTERS
Insurance
Claim
Emergency
Dispatch
Analytics
Performance
based
Assignments
Scorecards
Scheduling
Damage
Assessment &
Parts List
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
Connected car gives OEMs FNOL
Accident Call Insurer
Shop Located
Est.Sched.
Est.Compl.
RepairSched.
RepairCompl.
Car Delivered
Current InsurerDRP Process
CSI
Quality-focused, dealer
supported shop using
OEM Procedures,
OEM parts - $140MM
per point, retention marketing opportunities (1% total loss) - ~$1bil
Retention -~$60 Bil,
unperformed aftercare @ dealership(Referrals)
X
Telematics-based
FNOL
Predictive
estimate directly
to shop
Certified shops retention & resale
opportunities realized –1% new car sale retention ~$5bil
X X X
Claims Efficiency – Improved Cycle time Reduced Cost – Happier Customers
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
It’s not just about parts… It’s much bigger• Consumer Awareness - The market has been losing sight of the consumer and yet the consumer
is the lifeblood for OEM’s. 1% of market is worth $5 billion
• Consumer Sentiment – OEM’s can no longer put their brand at risk to shabby claims and repair experiences…what if it goes viral…and it does go viral
• Retention – Getting vehicle brand owners back into vehicle brand is critical, consumers change brands 40% of the time if their car is totaled. This is a multi billion dollar opportunity (based on US news and BB&T data).
In addition, Chrysler senior execs say if there is an issue with an accident repair, 60% of those vehicles will be sold or
traded within a year. 63% will be replaced with a different brand
• Telematics – Will change the workflow and power status of this industry forever the CONNECTED CAR has already started the journey
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
OEMs return to the market
All Assets Deployed
Parts Programs
New stakeholders see bigger picture and deploy all the OEM Assets to secure the future of the business
OEM’s will bring more effective parts programs
to market such as MPL sun setting the parts
battle and challenging the Insurer dominance
OEM Stakeholders
Industry Support
As brand reputation is at risk the OEM stakeholders become Parts group & Sales/Brand group
OEM’s will provide much needed industry support
in terms of technical, technology and resource
A Whole new World
Consumer NetworksOEM Networks emerge
that compete with Insurers for customer
mind share as the OEM’s target and focus on
consumer
With the old battle lines blurred the OEM’s from a position of necessity and desire create new paradigms in the space where anything is possible
PartnershipsThe OEM’s establish partnerships
with industry constituents
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
OEMs’MarketReturn
Why would the United Arab Emirates be interested?
It’s a global phenomenon
You can’t compare markets
Too diverse to standardize
But will not take 30 years. Certain markets will simply leapfrog
Too varied in their stages of development and infrastructure
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
You have to follow the car… excuse the pun
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
OEM Advanced Materials
ADAS Autonomous Market Trial
Fully Autonomous
X X X X
X X X 2021
X Waymo X
X X X 2021
X X X X
X X Waymo 2020
X 2022
X X X X
X MIT/Stanford 2020
X X 2018
X Stanford
X X X X
X X 2017 2022
X X X X
X X
All the major OEMs are deep into
development and testing
Fuel Economy 10%+Driver fatigueDriver ResourcesReduced Accidents ~45%More efficient payloads
Complex but inevitableGovernments supportiveBeing fast tracked Early adopters will benefit greatly
By 2020 we will have entered a new Socio Economic CycleWe’ll shift from ‘what’s in it for me’ to ‘what’s in it for us’More social conscience More environmental concernGreater value on well being over wealth
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Trucks will lead the way
Legislation will be complex but expedited
Socio economic demands a better system
94% of crashes = Human Error1.25 Million RTA deaths annuallyInsurance costs are set to explodeYet Insurance models are set to change beyond recognitionThe Environment can’t sustain the smogAutonomous/connected or otherwise the road ahead is very different
The human cost of vehicle transport today is not sustainable
Campus transport not far behind
Car share and car hail will grow rapidly
No matter what… the road ahead is changing
Trust me, insurers are preparing for this future landscape and have specialist teams working hard to figure it out
OEMs are at the forefront of creating this future and it’s making it’s way into the claims/repair segment
If you’re not preparing for a different supply chain model… you should be. How close are you to the vehicle?
Repairers should be planning for a future whereby there are less repairs, coming from a different source, requiring higher and different skill levels and using different procedures, equipment and technology than today.
So how do you prepare?
SCG Management Consultants LLC – Private & Confidential – Not for Re-Distribution without Permission
Thank you
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