The Light and Dark Side of The Black Box: Sensor-Based Technology in the Automotive Industry

Sensor-based technologies are increasingly integrated into diverse aspects of our everyday lives. Despite the importance of understanding how these technologies are adopted and exploited by businesses and consumers, the information systems (IS) community has thus far devoted relatively little attention to the topic. Accordingly, our objective in this paper is to foster an exploration of the issue amongst IS scholars by focusing on the emergent use of sensor-based technologies in the automotive insurance industry. Insurance providers are increasingly turning to such technologies to gain competitive advantage around risk assessment and behavior-based pricing. To investigate this phenomenon, we consider the experiences of two organizations operating distinct national contexts – Progressive Insurance (US) and Generali (Italy). These two insurance providers have been first movers in the adoption of sensor-based technologies for risk assessment and policy pricing. First, we highlight the key similarities and differences between the cases with regard to the technologies adopted, business models pursued, and anticipated benefits and pitfalls for the companies and their consumers. Second, in a more holistic way we discuss the implications and unintended consequences of sensor-based technologies in the automotive insurance industry. We formulate several research questions that will provide opportunities and encourage more research in this emerging area of study.