Balancing privacy with data collection in Allstate mobile app
- 02 November, 2015 22:58
Allstate Insurance Co. developed Drivewise, a usage-based insurance (UBI) program, to collect telematics information about customers’ driving behavior, such as braking, speed and driving time of day. Originally enabled by a device that plugs into a customer’s vehicle, the company has since developed Drivewise Mobile.
This app collects the same information via a driver’s smartphone as long as the phone is in the vehicle. Although other insurance companies have similar telematics offerings, Allstate is the first major insurer to collect telematics information exclusively through a smartphone app. The app also allows Allstate to have a more interactive experience with its customers.
Allstate says it currently has 820,000 customers actively participating in its Drivewise program.
Ginger Purgatorio, vice president of Allstate’s Drivewise program, acknowledges that there were challenges to getting Drivewise up to full speed. Allstate had to contend with privacy concerns around collecting telematics, something that many companies struggled with as they moved into big data and analytics programs. But Purgatorio says consumers have become comfortable with, and accustomed to, companies collecting data to help better serve them, making this early challenge nearly moot today.
“Customers are getting used to a different way of communicating with companies; as long as they’re getting value back, they’re willing to provide information to get that value,” Purgatorio says.
Allstate had created a device that plugged directly into a port underneath a vehicle’s steering column, explains Purgatorio. Similar to other insurance companies, that device fed information about the driver’s driving habits back to Allstate, which use the data to come up with a score that could influence that driver’s insurance costs.
But Allstate wanted to share more of that driving information with the drivers themselves, Purgatorio explains, so in 2010 the company created a web interface that allowed customers to log in and see details about their driving practices.
That helped connect Allstate with its customers on a whole new level, Purgatorio says, but it still required initiative on the customers’ part. So company leaders had the idea to develop Drivewise Mobile, which provides not only details about the driver’s driving habits but delivers related information in near real-time right to the driver’s smartphone.
Chetan Phadnis, vice president of connected car engineering at Allstate, says Allstate workers were inspired to build its Drivewise Mobile app after seeing the success of its plug-in and the evolution of smartphone technology.
“When you think about what’s happening with smartphones and the sophistication of the sensors in smartphones and you can see the data we’re able to collect, we saw we could do something interesting,” Phadnis says, adding that Allstate already had strong in-house talent for developing algorithms and analytics program.
The Drivewise team included software engineers, analytics experts and insurance product development professionals. (The project came under the car connectivity unit, because Phadnis says, “We saw it wasn’t just about insurance but also about proving features and capabilities to enhance the driving experience.”)
The product launched in early 2014.
Phadnis says Allstate wanted to do more than collect data from cars and drivers, something it was already doing with the plug-in.
Phadnis says developing for the mobile space has some built-in security layers. “One of the benefits of building a mobile product is you get the benefits of riding on the security constructs of the smartphone providers. All the protocols we use go through their security protocols. They are pretty top-notch in terms of addressing customer data privacy and access to sensitive information. That’s been a benefit for us,” Phadnis says.
Purgatorio says another challenge that Allstate faced was the quick pace of development required to launch its mobile app. “The pace of refreshing the user experience is faster than Allstate typically moves,” Purgatorio says.
The company needed to think differently as a result. “That was a change management exercise internally for a company that’s 80-plus years old,” Purgatorio says, explaining that in the past 18 months Allstate reorganized teams associated with this work, taking employees from business, technology, marketing and analytics “putting them all in the same organizations so we could work in an agile fashion. It broke down typical organizational barriers you have in companies like ours.” Purgatorio says, adding that Allstate relocated workers so the majority of them are now co-located in the same place.
Another big challenge Allstate faced when developing its Drivewise app was shifting its perspective, Phadnis says.
One of Allstate’s strengths is building insurance products, Phadnis says.
“But when you think about putting a mobile app onto your phone, they’re no longer comparing that app to another insurance company. Consumers are comparing it to other apps [in general], and new expectations come with that,” Phadnis says. “That was a big lesson learned. We really learned that we had to make not just insurance products but digital consumer products together.”
To do that, Phadnis says the company had to create and bring in skills around user experience, deeper software engineering and product management.
The team also had to build up skills around sensor technology and how they could deliver real-time analytics, and Allstate’s team had to work together to develop the algorithms needed to turn data from the vehicles into information useful to Allstate and drivers.
Allstate plans to introduce new features such as an audio alert that will let drivers know if they’re braking hard or driving too fast; a find-my-car function for drivers who need help finding their parked cars; and for Android users, a function that responds to incoming texts with a message stating that the user is driving (a feature Allstate hopes will help eliminate distractions from texts).
Despite those features, Purgatorio says one of the main benefits of Drivewise app remains its ability to give customers some control over their insurance costs. The app “makes providing the feedback to the customers seamless. Prior to the app, you relied on the customers to go to the website. That’s not as convenient as having it on their phone and being in their pocket at any given moment.”
Users can check the app once they’ve arrived at their destination and get feedback on their recent driving performance. The app has trip history and shows progress over time, so users can compare past and present performance.
Purgatorio says Allstate sees evidence it’s working. “We do see customers alter their behavior. I do think the key is the engagement factor. They review it, internalize it and react to it, and we believe we can influence their behavior for the positive. We see customers make a game of it, or across their households. It’s more like a challenge.”
Purgatorio says Allstate wants to up the app’s engagement level by adding more interactive features. Among those forthcoming additions is a feature that will allow users to challenge themselves to drive more safely and another feature that provides more feedback on driving performance to the users.
“There’s a potential for telematics to revolution the insurance industry, particularly insurance pricing,” Purgatorio says, adding that “the more data you have, the more personalized the product can be. I think that’s the future for us here.”
He says Allstate sees opportunities to add value-add functions, for example, a feature that connect customers with rescue and vehicle repair services.
Purgatorio says Allstate believed it had to move in this direction: “As the world continues to evolve, less and less people are interacting on their computer and websites and they’re moving to the mobile space.”