=Paper=
{{Paper
|id=Vol-2248/paper10
|storemode=property
|title=How to Build an IoT&Data Platform for Transforming the Insurance Industry with Connected Cars
|pdfUrl=https://ceur-ws.org/Vol-2248/paper10.pdf
|volume=Vol-2248
|authors=Enrico Mancin
|dblpUrl=https://dblp.org/rec/conf/ciise/Mancin18
}}
==How to Build an IoT&Data Platform for Transforming the Insurance Industry with Connected Cars==
https://ceur-ws.org/Vol-2248/paper10.pdf
How to build an IoT&Data Platform for transforming
the insurance industry with connected cars
Enrico Mancin
Watson IoT Europe
IBM
Turin, Italy
enrico.mancin@it.ibm.com
Copyright © held by the author
Abstract— The Systems Engineering approach and practices insured cars to track vehicles and be immediately informed
have been key success factors for developing Telematic Hub for about car accident events. Soon, Insurance Companies have
Insurance Industry as a real solution for production helping to been collecting a huge amount of data with the imperative need
meet customer specific requirements since the first provided to analyze raw data for building and improving over the time
input. Telematic Hub aims to leverage data coming from possible their own algorithms.
existing motor solutions and to extend/expand telematic
capabilities in order to easily respond and adapt to insurance
industry business model changes. This innovative solution offers II. OBJECTIVES
full support for three logical layers: Connected Devices, IoT In order to achieve their aim of becoming more effective at-
Analytics and Big Data. risk selection and more efficient at handling claims, Insurance
Companies needed more sophisticated techniques to analyze
Systems Engineering adopted practices will be discussed for data. Through the black boxes installed in the vehicles and the
developing the Telematic Hub solution going from concept to IBM IoT and Analytics Platform, an Insurance company can
production and operation.
collect data like:
• The GPS position of the car;
I. INTRODUCTION
In Insurance Industry, Telematics is a “game changer” for • Driver behavior during regular trips (driver profiling);
car insurance business: it adds value along the whole value • Specific events (e.g. to understand the dynamics of
chain from customer acquisition through to pricing and claims car accidents);
management. This helps Insurance companies to understand
the need to revise product strategy, implementing large IoT These elements were being measured for two key reasons:
programs in order to recover Revenue with new telematics- (1) to limit the number of false claims and (2) to understand the
based product and to reduce risk costs for Claims and Crashes. dynamics of accidents (in attempt to predict and prevent).
Insurers in Europe have experienced fraud on an increasing The adoption of SE Lifecyle and SE practices allowed the
scale in their claims processing over recent years. Insurance development team to meet customer objectives, short time
Europe, the European (re)insurance federation, estimates that delivery requirement and budget fully achieving all required
the total from all cases of fraud – both detected and undetected functionalities implemented in the final Telematic Hub
– amounts to 10 percent of overall claims expenditure in solution.
Europe. In Italy, the issue is particularly bad. Unorganized and
professional fraud is one of the reasons why Italy’s motor III. APPROACH
insurance premiums have risen to the highest levels in the EU
Setting up a brand new telematic platform is a complex
(about 2-3 times higher than in France). This problem is even
work. Even with appropriate investments it is very difficult to
worst in southern regions of Italy where insurance frauds and
quickly implement a brand new Telematic platform. Since
tariffs are typically higher. Italy’s politicians have picked up on
every system lifecycle consists of multiple aspects, including
the topic and have demanded countermeasures from the
business, budget and technical ones, the systems engineer has
insurance industry. The Italian government set a requirement
to create technical solutions that are consistent with the
for motor insurers to install telematics devices in all vehicles
business case and funding constrains. Having fully adopted the
and use the data to help set premiums.
SE Lifecycle Stages for this project, during the Concept Stage
So, Insurance Companies in the past few years started to all the available documents in terms of RFIs, RFPs and market
invest heavily in installing black boxes (OBU devices) in analysis had been collected in order to properly shape the high
level customer requirements set while characterizing the IV. CONCLUSIONS
solution space with a very early conceptual architecture. The Today the Telematic Hub solution is in Support Stage
Concept Stage was crucial for refining the stakeholder needs as according to a continuous improvement approach. Through
well as selecting the proper technology for supporting the obtaining data ownership, Insurance Companies adopted IBM
solution. For example, by utilizing IBM’s Connected Vehicle Telematic Hub solution are able to understand how to improve
Insight cloud managed service, the System Engineers were able the quality of Telematic data of trips and crashes with single
to quickly identify the appropriate solution architecture for GPS point. They identify driver behaviors clustering driving
building the brand new telematic Platform leveraging out of the styles. This creates the foundation for Insurance clients to meet
box capabilities including map matching, trajectory data their goal of achieving more effective fraud detection. The
management and analytics, driver behavior analytics, driving online detection of vehicle position (in the case of car crash)
context analysis, mobility footprint profiling, trajectory pattern also allows Insurance Companies running Telematic Hub to
analysis, map event pattern analysis, real-time and dynamic quickly react to first notification of loss, putting in place a
map context management and map topology fencing. stronger anti-fraud system and a better risk selection.
All the data engineered during the Concept Stage allowed Additionally, the IBM Team have been able to build a
the Systems Engineers to make the decision about the proper component architecture designed around Connected Vehicle
lifecycle approach to be adopted for the Development Stage. Insight SaaS, so Telematic Hub solution can today leverage
During this stage the development team was focusing on Driver Insight provided analytics to build new analytics on top
several activities about: of them. Those new analytics will ensure Insurance Companies
running Telematic Hub competitive advantage while
• Functional and non-Functional requirements; leveraging IBM technology covering all basic needs like:
• Use Cases; • Support for specific devices designed for insurance
• Context; case;
• Interfaces; • Logistic services with body-shops covering all regions
and provinces (Italy);
• Component Model;
• Mobile connectivity services;
• Operational Model;
• IoT Platform services;
• Service Model;
• Data Platform services and Infrastructure services;
The Systems Engineering approach and practices have been
key success factors for developing Telematic Hub for
Insurance Industry as a real solution for production helping to
meet customer specific requirements since the first provided
input and for fully addressing the following nowadays main
Insurance Industry needs:
• Lower claim frequency and average claim paid
• Become stronger at fighting fraud and better at-risk
selection
This led to a development project for implementing the
required basic services: New telematic contracts, Voucher
management, data lake service, analytics services, integrated
management services, device management services, logistic
management services, call center.
The key gate for the Production Stage was the dynamic test REFERENCES
performed directly with the customer to verify the correct
[1] INCOSE, “Systems Engineering Handbook, A Guide For System Life
behaviour of all the application compared to the business needs Cycle Processes And Activities”, Fourth edition, INCOSE-TP-2003- 002-04,
and stakeholder requirements, activity typically named UAT 2015.
(User Acceptance Test). The system went live for the [2] ISO/IEC/IEEE 29148 - Systems and software engineering — Life cycle
Utilization Stage exactly after 9 months from the kick-off date processes — Requirements engineering.
of Development Stage in perfect line with the project plan [3] ISO/IEC/IEEE 15288 - Systems and software engineering - System life
cycle processes.
milestones.
[4] Falcone, A., Garro, A., and Tundis, A. (2014, September). Modeling and
simulation for the performance evaluation of the on-board communication
system of a metro train. In 13th International Conference on Modeling and
Applied Simulation, MAS 2014 (pp. 20-29).