Real-Time Driving Behaviour

Last week, Tesla announced that they now offer insurance using real-time driving behaviour. They started in Texas and they aim to cover the whole of the US in 2022.

The key words here are “real time driving behaviour”.

This latest move by Tesla makes a superb business school case study and I’d be the first to sign-up to presenting one. I’d also be the first to argue that this is a brilliant move for an automobile manufacturer that is morphing into a giant data repository that happens to manufacture vehicles. This is also a strategic move for any insurance company to watch closely and feel concerned.

The same key words “real time driving behaviour” also raise ethical concerns as they subject Tesla owners/drivers to a host of algorithmic evaluation and pricing which most likely worry the vehicle owners.

If I were to sit on the Tesla’s board, these are may be some opening questions I’d probe the CEO with:

  • Do we understand the granularity of the ethical concerns we expose ourselves to?

  • Is it worth exposing ourselves to a host of predictable risks?

  • How do we mitigate these risks?

  • Do we have a detailed risk mitigation strategy?

  • What are our long term revenue projections for this vertical?

  • Should we launch this type of insurance just because we can?

  • Let's discuss the algorithm structure and design? Where are its fault lines?

In closing, I also have a question for you:

Would you like your car to constantly evaluate you and price your insurance premium based on your driving style?

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