Unlock the Value of Vehicle-Generated Data Through UBIUnlock the Value of Vehicle-Generated Data Through UBI
Industry Insights


August 16, 2021



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Unlock the Value of Vehicle-Generated Data Through UBI

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Welcome to Part I of our three-part series on Connected Cars & Usage Based Insurance. In this post, we will be covering the basics of UBI. What is it? Who reaps the benefit? And what is the best way of implementing it? Read on to find out more.

Data Monetization

By default, connected cars produce a massive amount of data, both internally and in conjunction with third-party sources. Vehicle-generated data is often related to driver and vehicle safety, including vehicle security data, ECU health monitoring, crash response systems, and even driver habits. This type of data is extremely useful for drivers in anticipating maintenance needs as well as for OEMs in identifying ways to improve existing products and solutions. Data from third-party media sources include primarily Internet-driven data, such as navigation, weather, and entertainment.

Through tracking and analysis, OEMs can provide customers with data-enabled features that cater to their specific needs and usage preferences. These features are not only beneficial to the customer but provide the manufacturer with an opportunity to turn data into money. According to a McKinsey report, the global revenue from car data monetization is expected to rise to between 450 and 750 billion USD by the year 2030.

There are multiple ways to turn data into gold, such as utilizing data in the development of new products, or by teaming up with tech giants, retailers, and service providers. These types of partnerships would likely involve monthly or yearly subscriptions on the part of the driver. For example, bringing in Google Maps to offer traffic congestion alternatives, teaming up with restaurant applications for in car purchases—similar to the way Alexa allows you to order food without picking up the phone—or incorporating roadside assistance services that activate in the event of an emergency.

Unfortunately, most of these revenue streams require additional time and resources before they turn any kind of profit. Although these are great long-term investments, there is an easier way to unlock the value of vehicle-generated data in the immediate future, and that is through Usage Based Insurance (UBI).

What Is UBI

UBI, or Usage Based Insurance, is an automotive insurance option from certain providers that offers policy rates based on the driving habits of the insured. By utilizing vehicle-generated data, UBI programs track and assess driver tendencies such as speeding, rapid acceleration, harsh braking, drive times, mileage, and usage time of day. Drivers who consistently demonstrate a history of safe habits are then rewarded with lower insurance rates.


Implementing and participating in a UBI program benefits all parties involved including OEMs, insurers, and the insured. They range from tangible financial benefits to convenience and enhanced safety. The ability to collect vehicle data gives automakers key insights on driver preferences and trends for product and service development, it provides insurers with invaluable information that helps prevent insurance fraud, and it allows consumers to receive competitive rates based on actual driving behavior. UBI programs are easy to integrate and eliminate most of the hassle involved in determining insurance premiums and driver eligibility. In addition, UBI incentives encourage attentive and cautions driving, which enhances safety at a communal level.


Unlike other data monetization methods, UBI does not require the allotment of additional funds and resources to generate revenue. It allows OEMs to gain valuable insights on driver behaviors, preferences, and needs which they can utilize in future models and products. It also serves as a selling point for drivers who are interested in reaping the benefits associated with UBI, such as lower insurance premiums. This passive source of income is already benefiting certain OEMs, such as Hyundai Motor America, which introduced UBI in their vehicles in March 2021.


Competitive rates are one of the main reasons insurance companies lose clientele. Traditional pricing is based on risk assessment factors such as age, gender, geographic location, and income. Unfortunately, these parameters frequently fail to serve as adequate predictors as many are based on biased assumptions.

With UBI programs, insurance companies can cater rates for drivers based on more accurate predictors like driving behaviors and mileage. This pricing model is not only more efficient—as it does not require detailed questionnaires, investigations, or the installation of additional hardware (OBD-II Ports)—but it also helps prevent inaccurate biases.

UBI allows insurers to monitor vehicle usage and driver habits continuously and document historical data. This, in turn, improves customer relations and retention through the offer of transparent pricing to both new and returning clients. Over twenty-five insurance companies already utilize UBI in their pricing schemes, including Nationwide, Progressive, Liberty Mutual, Geico, and State Farm.


Similar to the way cookies provide consumers with an enhanced browsing experience, UBI provides drivers with a superior driving experience. It allows drivers to rest easy knowing they are receiving fair and transparent pricing that is not based on unreliable factors. The association between lower insurance costs and safe driving also encourages drivers to be on their best behavior, which is a two-fold benefit: not only does it reduce the cost of owning a vehicle, but it also decreases the likelihood of accidents due to risky habits.

Traditional Solutions and Sibros Solutions

Traditional UBI solutions are burdened with limitations. They often require the installation of additional hardware, which is both costly and time-consuming for the OEM, or rely on investing in existing smartphone applications. We will discuss both implementation methods in greater detail in Part II of this series.

Another logistical issue is having an in-vehicle system in place that can process and analyze all the data received. Connected vehicles produce around 25 gigabytes of data each hour. To put it into perspective, the data from one hour of vehicle use equates to 1,250 hours of internet browsing or 50 hours of video streaming. When dealing with both this immense volume of data as well as the speed of data production, most existing systems are not built to tackle the challenge of filtering the necessary relevant information.

Sibros’ solutions offers an innovative and effective means of storing and analyzing data for use in UBI programs. With vehicle-wide integration, Sibros’ OTA Deep Logger collects and transmits data from every ECU in the vehicle and makes it available for advanced analysis with customizable parameters and filters. For example, users can create a vehicle grouping excluding cars that experienced frequent sudden braking, thereby allowing insurers to identify and reward customers who displayed caution and prudence while driving. Sibros solutions also provides more accurate and robust information when compared to data collected by OBD-II hardware and third-party solutions such as mobile apps.

Avoid getting caught up in the irrelevant data that makes UBI programs complicated and difficult to implement. Instead, let Sibros solutions help you focus on the data that matters. To learn more about how Sibros can streamline your UBI program contact us today to schedule a demo.

Albert Lilly
Albert Lilly
Albert brings over 20 years of industry focused enterprise software marketing and business development experience ranging from VC-backed startups to large scale tech organizations. He is a University of Texas at Austin alumnus.