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SECTION I FUNDAMENTALS OF THE UBI MARKET INTERVIEW WITH GARY HALLGREN, PRESIDENT, CONNECTED CAR ALLSTATE INSURANCE © PTOLEMUS CONSULTING GROUP Gary, could you please tell us what Allstate’s Connected Car business now represents? I joined Allstate in September to take this newly created role. Allstate Drivewise is the heart and soul of our Connected Car business. The Drivewise programme was started in 2010 and we will approach one million active users in the system by the end of 2015. CANNOT BE DISTRIBUTED WITHOUT PTOLEMUS’ PRIOR It is also growing. About a third of new Allstate auto customers enroll in the Drivewise programme. It is continuing to show progress. Team wise, the Connected Car b u s i n e s s w a s p r e v i o u s l y separated into different parts of the organisation and it was put t o g e t h e r u n d e r n e a t h o n e umbrella about a year ago. I was hired to run that team. When you think about its scope, five years ago, there were very few people involved. It has grown exponentially. We continue to invest in it and we will continue to accelerate. Another metric is the number of miles analysed. It was very important when we were smaller. We passed through the 10 billion mile mark some time ago. Now we don’t pay too much attention to it as a specific metric of progress. What was the logic behind Allstate’s decision to create this Connected Car business? Ultimately, when you think about UBI, you make the investment to connect to your customers. Then the question is: how do you evolve the relationship? So Connected Car is definitely far bigger than just UBI. A big part of that is now to add more s e r v i c e s l e v e r a g i n g t h e infrastructure that we have created and other assets that we generate in the business. WRITTEN One part of that is adding in Allstate Rewards. As long as we a r e c o n n e c t e d t o t h e s e customers, they should be rewarded by earning points for safe driving. We launched that programme about 6 months ago. Customers use those points to earn savings on name brand merchandise. That makes it a little bit different. Allstate Rewards is available to any Allstate customers that are currently enrolled with us. And then because safe driving is a tenant of who Allstate is as a company, we made it available to anybody even if they are not an Allstate customer. It is an area where we are leveraging a lot of the same technologies but providing value to the broader consumer, even without Drivewise. <strong>AUTHORISATION</strong> Should we understand that these points are attributed to customers who have no claims? © PTOLEMUS - www.ptolemus.com - Global Usage-based Insurance Study - January 2016 - All rights reserved Strictly reserved for the internal use of the reader - Distribution to third parties is prohibited 52
SECTION I FUNDAMENTALS OF THE UBI MARKET It’s open to everyone. In fact, if you are a non-Allstate customer today, you can download the Drivewise mobile app and it will still collect data on your trips. If you drive safely, you will earn points and you will be able to r e g i s t e r f o r s a v i n g s o n merchandise. And if you are an Allstate customer or want to be one, the same is applicable for you but you would also sign up for the Drivewise programme and you qualify for savings on your auto insurance as well as receive the Allstate Rewards. © PTOLEMUS This seems to underline that you are able to propose those discounts largely based on the f a c t t h a t y o u o b t a i n e d favourable conditions from your partners. You bring them a large number of customers and they give you nice conditions. CONSULTING GROUP Yes, I think that’s a good way to think about it. We leverage the A l l s t a t e b r a n d a n d t h e relationship that we have with our customers and part of that is the Drivewise UBI programme. But there are other services that we are offering. Rewards is only one example. CANNOT BE DISTRIBUTED WITHOUT W e a l s o a r e t h i n k i n g o f introducing more consumer services. And those could be services that we might conceive of and develop to promote safety or enhance the driving experience. We will continue to roll out programmes like that, using applications that we develop. PTOLEMUS’ PRIOR We are also building a platform that third parties can create applications and build upon in order to offer other consumer services as well. So the bottom line when we think about Connected Car is that we are improving the experience for our customers and otherwise enhancing the relationship that customers have with the Allstate brand and our agents as well. A platform opened to third parties. That sounds familiar when we know that you are coming from Telogis. There is a little bit of that but actually it was announced in early 2015 by our EVP of Allstate Te c h n o l o g y a n d S t r a t e g i c Ventures, Suren Gupta, well before I came on board. WRITTEN It had been in the works for a while but yes, I relate to it thanks to my telematics background, as well. That sounds very exciting, much more ambitious than what we’ve seen so far. It could mean that Allstate is taking the lead in the innovation race. If we try and think about the b i g p i c t u r e , w h y i s t h e Connected Car important for Allstate? If you listen to Tom Wilson, our CEO, when he talks about where t h e b u s i n e s s i s g o i n g , h e emphasises the Connected Car, the relationship it creates with our customers and how it will evolve going forward. We have definitely been investing in understanding where our business will go in the future. You and I have been sitting at the same conferences for a lot of years. <strong>AUTHORISATION</strong> © PTOLEMUS - www.ptolemus.com - Global Usage-based Insurance Study - January 2016 - All rights reserved Strictly reserved for the internal use of the reader - Distribution to third parties is prohibited 53
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