Now that “everyone has a smartphone” and the sharing economy is in full swing, companies engage customers and do more via mobile, cloud, and analytic platforms. Variety of new mobile apps are getting into first party crowd sourcing—where the consumer endpoint can leverage their smartphone to validate and verify data essential to underwriting and claims. For example, in some apps, they use video conferencing to record damage and give statements. In others, they catalogue room sizes and contents and further afield they can submit pictures of vehicles which can be classified for use type, tracked for evidence or even substantiating the existence of any prior damage.

But a new kind of app is going straight to the core—where regular recordings of odometer information are being used for active management of auto insurance mile bands in pricing and in billing. This approach takes most of the cost out of the way for just collecting mileage data that also happen to come along with other data in a connected car solution.

Once a critical data element like mileage can be sourced in the mass market at a very low cost, the other data (trip recording, time of day, day of week, braking patterns, turn by turn acceleration, behavior profiling, and driver scoring) now have to fight for relevance on their own predictive value of risk assessment and cost.

In a commonplace scenario, a retiring commuter with 50 years of claims free driving history and a perfect underwriting profile sees practically no benefit when changing from the workday 15,000 mile year to her retiree 4,000 mile year. She also likely has many other policies bundled into her risk transfer coverage, but the change in driving exposure is a significant event. For other consumers, they just don’t drive much, and frequently have no knowledge of improved pricing options for usage-based insurance or pay as you drive programs that are free and as easy to use as snapping a photo with their phone.

While fleet telematics make sense for logistics and maintenance, and resource planning in large commercial operations, for small commercial fleets and consumers, the costs and privacy concerns have been a significant barrier to progress. The data from existing programs in commercial and personal lines initiatives have made the risk assessment process of integrating miles used easy. But the gap in scaling to mass market is the consumer.

A smartphone app will close this gap by lowering your data acquisition costs, improving the accuracy and timeliness of your underwriting data, engaging your policy holders to comply with discount programs, attracting new business where lower risk is priced more better, retaining customers who have a change in miles used with graduated price points, and perhaps adding other valued added personalized offers and services based on make/model/ mileage information.

As one industry underwriting executive states, “Interesting take to put the data control into the hands of the user rather than the provider of a plug-in device or smartphone app uploading directly to the insurer where we're not seeing the immediate value—as these telematics have been marketed as ‘save money’ devices.”

A first party data push works by augmenting customer interest in saving money while avoiding data privacy and security concerns. It is easier and cheaper than handling emails from insurers and agents, and the images of odometers submitted along with the co-sourced entered data can be audited or even further validated using independent third party rekeying of the data from the images.

It's a data fulfillment mechanism for auto insurance customer segments which don't use a dongle device, won't sign up for cell phone tracing privacy invasion, and can't be found with recent, repeated regularity in a data aggregator file. For many carriers, that's over half their book.