MESSAGE
| DATE | 2020-11-18 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [Hangout - NYLXS] tracking waves through the economy and it DOES
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wsj.com
GM to Sell Car Insurance, Using Data on Your Driving to Set Prices
Mike Colias
5-6 minutes
General Motors Co. GM +2.53% is launching a car-insurance business based
on the idea its vehicles can remotely track drivers’ behavior and set
insurance rates accordingly.
The Detroit-based auto maker will offer insurance plans branded under
its OnStar connected-car service, which comes installed on all GM
vehicles in North America, the company said Wednesday. Customers who
sign up agree to have their driving habits tracked, and those who obey
the speed limit, avoid sudden stops and practice other good-driving
behavior will be rewarded with cheaper rates, GM said.
For much of its history, GM offered insurance to drivers, ending the
business when it unloaded its GMAC financial-services arm in stages to
raise cash around the time of its 2009 bankruptcy.
SHARE YOUR THOUGHTS
Would you buy car insurance from GM or another auto maker? Why or why
not? Join the conversation below.
As more new cars are sold with built-in internet connections, car
companies are branching into services that aim to capitalize on the
growing reams of data generated by a vehicle’s onboard computers and
sensors. They are using it for everything from flagging possible
mechanical trouble to allowing drivers to order their morning coffee
from the vehicle’s multimedia touch screen.
“Who knows more about your vehicle than the people who manufactured it?”
said Andrew Rose, president of GM’s newly formed OnStar Insurance Services.
Still, the efforts have been slow to catch on, in part because some of
those same services—from navigation to parking—are easily available on
drivers’ smartphones, analysts say. GM believes the data it can collect
directly from its vehicles will deliver more-precise information than
insurance companies can now access.
GM will begin a pilot this week for its own employees in Arizona and
plans to offer it nationwide later in 2021, Mr. Rose said. The company
will partner with a subsidiary of American Family Insurance to
underwrite the policies.
So-called usage-based insurance policies have emerged as one of the more
promising uses for connected-car data, analysts say. Insurance companies
for years have been offering drivers discounts for good driving, relying
on portable devices or smartphone apps to keep tabs on the car’s movements.
Some auto makers provide driving data to insurance companies to help
connect their owners to better insurance rates, though few have gone a
step further to offer their own plans. Tesla Inc. uses data from its
cars to offer insurance to customers. Ford Motor Co. last month said it
would give vehicle owners access to cheaper insurance by beaming data
from the car to a data exchange used by many carriers to crunch rates.
The number of auto-insurance policies in North America that use
digitally-logged data from the car is expected to grow to nearly 50
million in 2023, from about 10.6 million at the end of 2018, according
to Berg Insight, a Sweden-based research firm.
GM in recent years has been exploring a way to return to the insurance
business by using data from its customers’ vehicles, Mr. Rose said.
To start, the company will set rates much like a typical insurer,
relying on traditional factors such as ZIP Code or the amount of driving
the policyholder does, Mr. Rose said. Eventually, GM will more heavily
weigh driving behavior and other variables in determining rates.
Eventually, it could even calculate the amount of times safety features
such as emergency braking are deployed, he said.
Another example: GM could track whether tires are inflated properly,
which improves stopping distance and reduces the risk of crashes, Mr.
Rose said.
Running an insurance division should help GM prepare for a day when it
may offer a commercial driverless-car service, Mr. Rose said. Future
autonomous robot taxis have the potential to upend the auto-insurance
market by eliminating human-caused crashes, though auto makers may need
to insure their cars, he said.
Car companies are gravitating to services that rely on specific
information from the vehicle that third-party app developers aren’t able
to easily replicate, says Brian Rhodes, a research and analysis manager
for connected cars at IHS Markit.
“The auto maker has more data at its fingertips that can tie into a
unique score and provide more value for insurance purposes,” Mr. Rhodes
said.
--
So many immigrant groups have swept through our town
that Brooklyn, like Atlantis, reaches mythological
proportions in the mind of the world - RI Safir 1998
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Being so tracked is for FARM ANIMALS and extermination camps,
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