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Insurers see 'more to be gained' with technology investments, says Arity exec

➤ Founded by Allstate in 2016, Arity helps insurers turn telematics data into solutions for improved transportation safety.

➤ Since 2010, Allstate and Arity have collected over 250 billion miles of telematics data that is being used to help predict risk and direct insurers to potential clients through mobile advertising.

Grady Irey got into analytics in 2012 on the "ground floor," helping in the development of Drivewise, Allstate Corp.'s mobile telematics program. Eight years later, he is helping to expand the use of that data as senior vice president for data science and analytics at Arity LLC, the mobility data company founded by Allstate in 2016.

Irey talked with S&P Global Market Intelligence about how Arity shares its data with insurers and other companies that need data-based decisions. The following is an edited transcript of that conversation.

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Grady Irey, Arity's senior vice president for data science, analytics.
Source: Arity LLC

S&P Global Market Intelligence: Since its founding in 2016, Arity has shared billions of miles in telematics data with tech companies, as well as insurers. What led to Arity being more than just an extension of Allstate?

Grady Irey: It starts with making transportation smarter, safer and more useful for everyone, and then it kind of goes into, "What are we uniquely positioned to do?", and we're really good at being able to identify and quantify risky driving. It was very clear that through the course of developing Drivewise, we established some really valuable capabilities. By the time [Arity] was created, it was a conscious decision. We could either keep these capabilities inside of Allstate and extract all the value just for ourselves, or we can open up to the outside world and use what we've learned for the greater good.

Arity's telematics data has been utilized in other ventures, such as its partnership with the family social networking app Life360, which has more than 20 million subscribers. What is Arity's role in that partnership?

Life360 is about keeping families connected and safe, particularly on the road. Part of the reason why Life360 works with Arity is that it is our technology is detecting and kicking off its accident rescue service, Driver Protect. Arity's mobile technology detects that a car collision occurred and enables Life360 to step in, and in some cases, automate emergency services to be dispatched to the scene of the accident. What that means is ... we've evolved into a very seriously valuable technology capability that can create value for tech companies and save lives. And it's through that kind of relationship that we're now able to offer the ability for insurance companies to advertise to individual drivers based on their individual driving.

That's where Arity Marketing Solutions comes in, where an insurance company can advertise to individual drivers based on a telematics score. How will it benefit the companies that use your data?

The collection of data that's necessary to understand the individual driver, how risky is that driver and to be able to manage that risk has happened after a company has acquired that driver. Once you acquire the customer, differentiating their premium-to-pricing regime is not nearly as valuable as having that correct premium at the point you offered them a policy in the first place. Then the key is how can we make that insight available before they're a customer, and that's a key part of our strategy.

What have you seen in terms of other insurers' investment in analytics? Are the working to make it a larger part of their business models?

I've seen a ton of investment in analytics, and I'm seeing companies that are actually reaping a lot of benefits from their investment in analytics. What we're sensing is, there's still a belief that there's a lot more to be gained. I agree with that and some of that kind of comes back to, again, "We can only do analytics with the data that we have available to us. How do we get more data?" And that's part of what our focus is, getting that data.