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Berg Insight reports car manufacturers are betting on insurance telematics

Berg Insight reports car manufacturers are betting on insurance telematics

Berg Insight has surveyed the car OEMs’ activities within insurance telematics as part of its IoT research programs focused on the automotive sector. The involvement of the automotive manufacturers in terms of telematics-enabled insurance offerings for consumers has started to increase from a low level. “While insurance telematics applications have previously been powered by aftermarket telematics players in most cases, there is now an increasing interest from automotive manufacturers driven by the general trend of connected cars which will make the prerequisite hardware for insurance telematics ubiquitous”, said Rickard Andersson, Principal Analyst, Berg Insight. The cost structure on many insurance markets makes it impossible to motivate retrofitting of telematics hardware from an ROI perspective. “This hurdle is now removed as the necessary hardware infrastructure is broadly available as standard on new cars”, concluded Mr. Andersson.

Many of these insurance telematics projects can be found in North America. General Motors’ OnStar subscribers can since 2016 sign up for Smart Driver, a driver feedback program where the participants after a three-month period receive feedback on their driving behaviour. They can then choose to receive quotes from participating insurers. OnStar data is used by several leading insurers in the US for pay-as-you-drive (PAYD) policies. Insurers participating in OnStar Smart Driver include Progressive, Liberty Mutual and Nationwide. More than 4.9 million OnStar customers have enrolled in Smart Driver since launch, and 2.8 million of them have also enrolled in the optional insurance discount program. GM’s OnStar is further taking part in the Verisk Data Exchange for telematics data and was joined by Honda’s HondaLink in 2017 and Hyundai’s Blue Link in 2018. The Verisk Data Exchange was in September 2019 collecting data from 5.4 million GM, Honda and Hyundai vehicles.

Additional initiatives on the North American market for example include Mitsubishi Motors becoming the first auto manufacturer to join the LexisNexis Telematics Exchange in 2017. Mileage data from automakers is available to participating insurance carriers through the exchange, enabling insurers to leverage standardised driving data for accurate underwriting and efficient claims processes. The mission of the Telematics Exchange is to help save consumers time and money as well as enhance safety through programs featuring proactive safe driving initiatives and personalised insurance discount offers. Nissan North America also joined the LexisNexis Telematics Exchange in April 2019. Most recently in August 2019, it was announced that LexisNexis was selected by General Motors as a preferred insurance data partner, with GM opting for the LexisNexis Telematics Exchange as its preferred portal for sharing consumer-approved connected car data with insurers.

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