Censio is a technology company that uses software and big data to make driving safer and more affordable. The company recently won a bid to provide its platform to Progressive Insurance to power that company’s Snapshot usage based insurance program. The company also recently announced a $10 million Series A round of funding.
Big data can lead to big savings with Boston-based startup Censio, a company that developed an app that measures drivers’ habits using the sensors in their cell phones.
Until recently, driving habits and the cost of car insurance were not correlated: age, gender, credit score, and the make and model of a car dictated how much you would be shelling out for monthly payments rather than whether or not you are a good driver.
In 2012, Progressive announced Snapshot, a hardware-based solution installed in cars to measure the speed, hard braking, and mileage of cars to determine the risk of the driver. This was the genesis of usage-based insurance, which gave Progressive visibility into the type of driver and risk they presented, allowing them to offer discounts to safer, low-risk drivers.
While Snapshot made great strides in usage-based insurance, it was held back due to the installation logistics and cost of hardware. Censio co-founders Brad Cordova and Joe Adelmann wondered if, and how, they could provide both drivers and insurance companies greater visibility into driving habits without the hassle of installing a device.
Sure, Progressive could find what the actual car was doing, but was there also a way to measure what was going on inside of the car? If Snapshot detected lots of hard braking, was it because the car in front of the driver was stopping short, or because the driver was texting? And could it actually change dangerous driving behaviors?
Cordova, Adelmann and the other co-founders Jon McNeill and Scott Griffith recognized that the increased presence of smartphones, which go where drivers go, would provide a way to see not only what the car was doing, but also what the driver was doing. In 2012 the team created Censio, a mobile app that measures driving behaviors and provides recommendations for how drivers can improve. Recommendations are tailored to the driver to help them become safer while limiting distractions, which are attributed to 80% of all accidents.
“It’s like a FitBit for drivers,” explained Censio President Kevin Farrell. “Most people think they’re fit until they actually put on a FitBit. Most drivers think they are good drivers until they measure their driving behaviors with Censio.” This rings true for Farrell, who was surprised with his Censio score and has since corrected some of his poor driving habits. “I think that to change anybody’s behavior, you have to show them what good and bad behavior is,” he said. “Monitoring has some influence, but now even without using the app my behavior isn’t anywhere near where it was when I first started using Censio.”
The benefit of Censio is two-fold: drivers are able to become better and safer while earning rewards and discounts for their driving habits, and insurers are able to more accurately price based on actual driving behavior instead of proxies. “70% of good drivers end up subsidizing the 30% of bad drivers,” Farrell explained, “But with Censio, we can bring driver behavior to the insurer and good drivers can see significant savings on their premiums from their insurance companies.”
As a Bostonian, one of my major concerns when I heard about Censio was if my morning commute on the MBTA, which is often less than ideal driving, would impact my score on Censio and therefore my car insurance rates. Surprisingly, the app is able to automatically identify and filter out public transportation rides, which Farrell describes as part of the app’s secret sauce. “The phone itself captures the trip and gets the raw data, but the real magic happens when the data is passed up to the Cloud on our SaaS platform.”
The young company recently won an 18-month competitive evaluation by Progressive in which it outperformed ten competitors and had both the best data accuracy and most minimal battery usage. “Progressive is such a pioneer in usage-based insurance and a fantastic company to work with,” said Farrell. “Censio can’t reward you for driving safe, but we can pass along the information to Progressive which can offer you savings.”
Censio’s team of 22 consists mostly of engineers, data scientists and machine learners who take the raw data from the mobile app to build a driver profiles. The company is looking to expand its Boston-based team and broaden its customer base to reach the 200 million insured drivers in the US.
“Our company was founded on using technology to increase driver safety, and bringing usage-based insurance to the masses,” said Farrell. “We truly believe that we can reduce distracted driving.”