A few weeks ago, Terry Shane, Founder of the Toronto bIOTAsphere (and better known to some as IOTerry), together with Brian Wong, Director of Strategic Initiatives at the bIOTAsphere, revealed a Proof of Concept using IOTA that seems to have grabbed the attention and imagination of many in the DLT and automotive space.
The Insure-My-Car demonstration was live-streamed (watch the recording on YouTube here) but was provocatively described as “Putting the Proof back in Proof of Concept”. We were intrigued and caught up with Terry on his way to Barcelona and the IoT World Conference to ask him a few questions about the project.
Why did you describe this event as Putting the “Proof” back in to Proof of Concept?
I think there’s a big disconnect for many people who are not totally immersed in DLT technologies. They understand that Distributed Ledgers are a disruptive technology, but still have trouble seeing how it will impact their lives in the near term. It’s all a bit too theoretical and far away. Many POC projects use “toy” cars or “toy” trains to illustrate general principles and still fail to create that “Aha” moment where end-users suddenly see the connection and understand that what’s coming isn’t ten or twenty years away.
We wanted to demonstrate just how real the technology could be by proving how these tools could impact our lives in the next few years. To make the point, we used a two-year-old production vehicle with no add-ons, hacks, or modifications to show how we could turn an existing business model on its head. Automotive insurance is a ubiquitous product, in an industry that is ripe for disruption and this was a great opportunity to show how new technology could potentially disrupt the space in the next 24-36 months. We’ve seen the taxi and hotel industries caught flat-footed by new models; insurance is the next low-hanging fruit. The demo was intended to be a bit of a wake-up call to the industry but mostly an invitation to forward thinking players to collaborate with us.
So why do you think that car insurance represents such a good opportunity?
Many people resent how much they spend on auto insurance because they feel that they are good drivers with a great track record and that somehow, they are subsidizing all of the “bad” drivers out there. The problem is made worse because automobile insurance is not a discretionary purchase – it’s a mandatory requirement if you want to drive a car. While many consumers think that insurance companies make huge profits, the reality is quite different. Automobile Insurance is typically highly regulated and premiums are often subject to government or regulatory approval that limits the profit margins of each company. But from the consumer perspective, since most of us don’t make claims, the entire system just feels “unfair” on a gut level. Competition is fierce and the industry is based on old actuarial models that use historical data that by today’s standards, lags the real-time nature of available data. Just look at tools like Waze that can reroute your journey based on an accident that happened two or three minutes earlier.