Back in insurance: GM will use driver data to offer bigger discounts

General Motors will launch an insurance service to revive business that was abandoned more than a decade ago, but this time more in sync with the connected car era,media reported. The service, called OnStar Insurance, will offer bundled insurance for cars, homes and renters among GM workers in Arizona starting this year. GM’s new insurance agency, OnStar Insurance Services, will be the sole agent for OnStar Insurance. Homesite Insurance Group, a subsidiary of American Home Insurance, will cover the program.

Back in insurance: GM will use driver data to offer bigger discounts

By the end of 2022, the service will be available to the national public — including those driving GM-branded Buick, Cadillac, Chevrolet and GMC cars, trucks and SUVs. For GM itself, however, the service was launched to take advantage of the large amount of data it gets from its OnStar connected car service, which is understood to now have more than 16 million members in the United States.

GM’s selling point is that the data can be an asset to drivers and help them profit from lower insurance rates based on safe driving habits.

Russell Page, GM’s head of business intelligence, said in a recent interview: “Our goal is actually to increase transparency and give our customers more control over how much they spend on insurance and the total cost of buying cars.” “

Data play is substantive. Since the launch of 4G LTE in 2014, the company has used more than 121 millionGB of data under brands such as Buick, Cadillac, Chevrolet and GMC.

The increase in connected cars, in turn, has generated a lot of data. GM has been one of the leaders in data collection, thanks to its long-established OnStar platform in 1996. But it is clear that GM is not the first and certainly not the last carmaker to seek to use the data to provide services such as insurance. Tesla, for example, has launched an insurance service in 2019 that promises to pay 20 percent or as much as 30 percent less than other insurers. Earlier this year, Rivian was revealed to be hiring an insurance agency data manager, a recruitment message that also showed the all-electric car maker’s plans to offer its own insurance services to customers.

But GM is under competitive pressure from smartphone apps and donge devices connected to the vehicle’s OBD-II port. The OBD-II interface tracks the car’s performance and driver data and is also linked to insurance discounts.

In fact, GM’s experience in this industry dates back to 1925. The carmaker spun off its insurance business in 2008. The company says its telematics data, combined with its knowledge of the car and its features, will allow it to offer drivers a big discount. “In the next few years, we’re going to use that in our learning and progress to launch new products,” Page said. (We) see it as an iterative development process. “