Smart Auto Insurance: High Resolution, Dynamic, Privacy-Driven, Telematic Insurance

Abstract

Data driven approaches to problem solving are, in many regards, the holy grail of evidence backed decision making. Using first-party empirical data to analyze behavior and establish predictions yields us the ability to base in-depth analyses on particular individuals and reduce our dependence on generalizations. Modern mobile and embedded devices provide a wealth of sensors and means for collecting and tracking individualized data. Applying these assets to the realm of insurance (which is a statistically backed endeavor at heart) is certainly nothing new; yet doing so in a way that is privacy-driven and secure has not been a central focus of implementers. Existing data-driven insurance technologies require a certain level of trust in the data tracking agency (i.e. insurer) to not misuse, mishandle, or over-collect user data. Smart contracts and blockchain technology provide us an opportunity to re-balance these systems such that the blockchain itself is a trusted agent which both insurers and the insured can confide in. We propose a “Smart Auto Insurance” system that minimizes data sharing while simultaneously providing quality-of-life improvements to both sides. Furthermore, we use a simple game theoretical argument to show that the clients using such a system are disincentivized from behaving adversarially.