New technologies and the data that comes with them are set to reshape the mobility ecosystem. In this episode of the McKinsey on Insurance podcast, Doug McElhaney, a partner in McKinsey’s Washington, DC, office, sat down at InsureTech Connect in Las Vegas with Robert Spencer, president and COO of Toyota Insurance. The two discuss the impending evolution of the mobility ecosystem and the opportunities it brings for OEMs and insurers to collaborate to provide the best possible experience to customers.
Doug McElhaney: How do you see the broader mobility ecosystem evolving in the next two to three years?
Robert Spencer: The first shift that we all probably know to be true is that there will be more electric vehicles, and with more electric vehicles will come more technology in those vehicles. The second is related to the use of data that’s coming from those vehicles—not just for insurance purposes but for everything. And consumers’ willingness to use their data for insurance has gone up. I think part of that is because there’s a better value proposition for what that data is being used for.
Doug McElhaney: In this evolution, where do you see new opportunities for insurance and being a partner of an OEM?
Robert Spencer: One of the biggest opportunities is the ability for OEMs to collaborate with the insurance industry. We don’t want to be an insurance company, but we have the same customer. And if we think about the evolution we’re seeing in the industry, whether it’s autonomous vehicles or electric vehicles, in the end, it’s still about how to provide the customer with a good experience. And insurance is always going to be a part of that, whether software is driving a person’s vehicle or whether they’re driving it themselves. If OEMs and insurers come together and find the best way to interact with that customer—potentially harnessing the customer’s data to do so—we can give them a better experience for both.
Our role at Toyota Insurance is to do just that: to improve the Toyota ownership experience by improving the insurance experience. At the end of the day, if someone’s complete car ownership experience is better when they’re driving a Toyota, they’re more likely to return to the brand.
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Doug McElhaney: Do OEMs and insurers have different goals that they have to balance in such partnerships?
Robert Spencer: I don’t think that there are separate goals. The OEM perspective toward keeping the driver safe should be the same from an insurance company’s perspective. A safer driver is very highly correlated with fewer claims, which is ultimately what the insurance company would also want.
When we think about the technology that’s in cars already, insurance companies are able to use some of the data that’s been generated. And that will only get better going forward because there will be more technologies that help keep passengers safe.
And if the customer is safer, insurance companies can provide a product that is either rated differently or better for the customer’s specific need. The benefit is passed along to the consumer from the insurance company. I think it probably takes time for some of the safety features to be proved to the point that they can be used for rating insurance, but that’s where we’re headed.
