Privacy concerns amongst PAYD problems
25 June 2008
Carmela Troncoso points to an article in “Telematics Update” about Norwich Union (NU) discontinuing their pilot pay-as-you-drive scheme. Despite them being rather coy about the exact reasons, some experts guess:
“Strategy Analytics analyst, Clare Hughes, said that prohibitive launch costs, privacy violations, patent fees, back-office data integration and difficulties in measuring costs versus benefits would inhibit the immediate widespread launch of PAYD schemes.”
There are two items of interest in this list, one obvious and one less so. The obvious one concerns privacy violations, and the perception from drivers that the insurance company and anyone who can get hold of the data can spy on their every movement. This fear is to some extent justified, which led us to propose PriPAYD, to alleviate exactly those privacy concerns. It is good to see that once more it is proved that privacy technology is an enabler, sadly the hard way for NU.
More subtlety the “back-office data integration” also relates to privacy. Requiring every data point to be transmitted to a central server, and building a gigantic silo of location data comes at a price. Processing this information to extract billing data, or even worse securing and managing access to it is an expensive business. If only PAYD providers stick to their core business model, i.e. provide insurance by the mile, type of road and time of day, they could get rid of data as soon as it is processed, reducing the costs of storage, further processing and management.
Interestingly the article points out that the future of PAYD rests in the services area: roadside assistance, emergency help, etc. This points towards an integration of the PAYD box with other components of a car, making it in fact part of a more general computing platform. Again, lets hope that this platform will be user centric, and will not be emitting a location trail to third parties.