Profiting from business model innovation: Evidence from Pay-As-You-Drive auto insurance

Desyllas, Panos; Sako, Mari

doi:10.1016/j.respol.2012.05.008

Cited by 288 publications

(182 citation statements)

References 47 publications

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“…A BM defines how an organization creates and appropriates value and thereby captures essential features of how companies conduct their business (Zott et al, 2011). Innovative BMs constitute significant sources of competitive advantage and firm performance (Casadesus-Masanell and Zhu, 2013;Desyllas and Sako, 2013;Zott and Amit, 2007), so organizations are motivated to innovate BMs by making fundamental changes in the way they create and appropriate value.…”

Section: Introductionmentioning

confidence: 99%

Learning while (re-)configuring: Business model innovation processes in established firms

Berends

Reymen

Podoynitsyna

2013

AMPROC

125

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This study addresses the question of how established organizations develop new business models over time, using a process research approach to trace how four business model innovation trajectories unfold. With organizational learning as analytical lens, we discern two process patterns: "drifting" starts with an emphasis on experiential learning and shifts later to cognitive search; "leaping," in contrast, starts with an emphasis on cognitive search and shifts later to experiential learning. Both drifting and leaping can result in radical business model innovations, while their occurrence depends on whether a new business model takes off from an existing model and when it goes into operation. We discuss the implications of these findings for theory on business models and organizational learning.

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Section: Introductionmentioning

confidence: 99%

Learning while (re-)configuring: Business model innovation processes in established firms

Berends

Reymen

Podoynitsyna

2013

AMPROC

125

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“…In a move that mirrors sensor adoption in automotive manufacturing (King & Lyytinen, 2005), auto insurance providers have experimented with using sensor-based systems as part of the PAYD insurance model (Boquete et al, 2010;Coroama, 2006;Troncoso, Danezis, Kosta, Balasch, & Preneel, 2011). As with other types of insurance, automotive insurance pools risk across a large number of policyholders (Desyllas & Sako, 2013;Harrington & Doerpinghaus, 1993). Specifically, automotive insurance providers collect fees (premiums) to cover the losses that a subset of policyholders experience.…”

Section: Sensorsmentioning

confidence: 99%

“…This shift in focus with the PAYD model means that insurance providers need to collect tremendous amounts of data (Desyllas & Sako, 2013). Specifically, vehicles must be equipped with, or connected to, technologies that can collect such risk-related factors as vehicle speed, rapid acceleration/deceleration, impact occurrences, time of day driven, and vehicle location.…”

Section: Sensorsmentioning

confidence: 99%

“…For consumers, PAYD insurance promises to increase the affordability and equitability of coverage because premiums are based on actually driving behavior rather than demographic characteristics and past events (Bordoff & Noel, 2008;Litman, 2011). For insurers, the PAYD model increases the visibility of driver behavior, enhances the ability to price risk, and fosters better driving behavior among policyholders (Desyllas & Sako, 2013;Westerman, Bonnet, & McAfee, 2014).…”

Section: Novel Business Models and Their Impact To Societymentioning

confidence: 99%

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

Marabelli¹,

Hansen²,

Newell³

et al. 2017

CAIS

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Abstract:Diverse aspects of our everyday lives increasingly feature sensor-based technologies. Despite the importance of understanding how business and consumers exploit and adopt these technologies, the information systems (IS) community has thus far devoted relatively little attention to the topic. Accordingly, in this paper, we foster an exploration of the issue among IS scholars by focusing on the emergent use of sensor-based technologies in the automotive insurance industry. Insurance providers have increasingly begun to turn 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 adopting 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 sensorbased technologies in the automotive insurance industry. We formulate several research questions that provide opportunities and encourage more research in this emerging area of study.

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“…Applied management and IS research is still underexplored and elaborated digital transformation impacts are not provided (Fitzgerald, Kruschwitz, Bonnet, & Welch, 2014). In relation to mobility, consumers' new digital lifestyles expect new digital businesses and services like car sharing (Rishi, Stanley, & Gyimesi, 2012;Desyllas & Sako, 2013). At the same time, new (digitally based) services are suitable to reduce the overall mobility quantity in a significant way (Shaheen, Camel, & Lee, 2012).…”

Section: Digital Transformation In the Automotive Sectormentioning

confidence: 99%

ICT-Platform to Transform Car Dealerships to Regional Providers of Sustainable Mobility Services

Berg

Gómez

Sandau

2017

IJIKM

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Aim/Purpose: The topic of this study is the ICT-enabled transformation of car dealerships to regional providers of sustainable mobility (e.g., car sharing). Background: Car dealerships offer specific conditions that enable a sustainable mobility offer, based on individual motorized transport like car sharing. This is especially useful in small towns or rural areas where people’s mobility is strongly dominated by private cars, and public transport coverage is limited. However, these new mobility services are combined services with the need of a deep integration of information systems, and these services are not yet related to car dealerships and customer acquisition has to be supported. Methodology: An empirical study with an inductive approach was chosen. The study consists of interviews with three focus groups of different stakeholders of car dealerships. Within the frame of the research project, “ReCaB – Regional Car-Balancing” a qualitative research approach was chosen. Within a design science approach the existing SusCRM architecture was adapted based on the elaborated requirements. Contribution: A software architecture is proposed, where Customer Relationship Management (CRM) components to market new sustainable mobility offers are vital parts and existing information systems of car dealerships are integrated. Findings: The basic feasibility of the establishment and customer acceptance has been demonstrated, at least in the area of car sharing within ReCaB. The execution in the car sharing field has already started and a number of car dealerships are already bringing their own offers to market. Major findings for the SusCRM architecture have been elaborated in a design science approach in the national German research project “Showcase for electro mobility”. Recommendations for Practitioners: There is still no fully functional prototype developed for this specific use case and evaluated in the car dealership environment. An implementation only, based on own efforts, is difficult for car dealerships because of the dealership’s lack of know-how as well as tight IT budgets. However, this approach appears particularly successful in rural areas where public transport services are heavily declining. For full implementation, the presented ICT support is imperative. Recommendation for Researchers: The research on the retailer level, especially in combination with a digital trans-formation by the use of ICT systems, is still fragmentary. Research in this area that both addresses sustainability goals on a general level and supports economical goals on the company level of automotive retailers would be useful. Impact on Society: Creation of sustainable offers as a substitute or supplement for mobility based on their own car is a promising way to reduce negative effects of mobility. Enhancement of the mobility of the people in rural areas is leading to a more active lifestyle by reaching the leisure facilities, workplaces and educational institutions in a sustainable manner. Future Research: In terms of the fast changing mobility landscape, especially on a technical level with the development of autonomous vehicles and digitalization of entire businesses new solutions are becoming accessible, that have to be integrated in further research.

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Profiting from business model innovation: Evidence from Pay-As-You-Drive auto insurance

Cited by 288 publications

References 47 publications

Learning while (re-)configuring: Business model innovation processes in established firms

Learning while (re-)configuring: Business model innovation processes in established firms

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

ICT-Platform to Transform Car Dealerships to Regional Providers of Sustainable Mobility Services

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