Allstate Steps Out of the UBI Vehicle and Mobile App Box with the Launch of Arity

By Randy Field

On August 4, 2016, Allstate took a step beyond UBI vehicle telematics and mobile apps with the announcement of their new stand-alone business unit: Arity. Arity’s launch occurred in 2014 when Allstate Northern Ireland Limited filed to trademark the name.

Per the description included in its trademark, Arity’s app gathers data from wireless plug-in diagnostic devices and from wireless internet devices that provide telematics services and have cellular function—a method which enables collection of business and consumer-behavior data to support database analytics connected to home, consumer, and vehicle devices.

What is Arity?

The interesting thing about Allstate’s announcement is what it does not say. Several posts announcing the launch of Arity included a picture of a Drivewise® device being plugged into an OBD2 port. Allstate has a standalone Drivewise mobile app, too. Plus, Allstate Corp. Chief Executive Officer Tom Wilson is quoted as saying that Arity can “incorporate new data sources and enhance analytical capabilities in ways that we weren’t able to do when it was embedded in the insurance company.”  Wilson further states that Arity’s platform is large enough with Allstate customers in it, but that Allstate would like to quickly grow it even more with a broader set of customers.

Questions remain, however: Does Arity have partners that are currently providing customer data? What data is Arity collecting? How are consumers protected from unauthorized use of 3rd party data? Who leads Arity’s Executive Management team? Is Arity a stand-alone Northern Ireland business unit? How does Arity connect the consumer, vehicle and home?

Perhaps more importantly: Has the value of data gathered from Drivewise plateaued? If so, news outlets missed the point when including a Drivewise plug-in device image in their coverage.

What Arity Might Become

If it becomes a “big data” aggregator for the insurance industry, Arity is a step in the right direction. Arity can follow the path taken by Allstate’s $1 Billion acquisition of Esurance and Answer Financial from White Mountains Insurance Group, Ltd. Allstate’s Answer Financial helps drivers and home owners find deals through their website and mobile apps. Their partners include Progressive (Allstate’s reported arch nemesis for Drivewise), MetLife, Safeco and 21st Century.

The insurance industry ROI from programs to capture driver scores through devices or mobile apps has been elusive. Although the concept is valid, the execution has been problematic. Each insurance company cannot reinvent the driver score wheel. Insurance companies are not in the telematics business. As a separate business unit, Arity can structure itself to gather data from telematics and IoT service providers. Much like today’s credit score providers that are used by underwriters to rate risk, a “big data” individual driving score provider will emerge one day. Arity could be a step toward that day. For now, it appears to be a focused reorganization of existing operations.