Radical changes in marketing and product design of auto insurance policies will help unlock customer benefits of sharing driving data, a well-known insurance telematics evangelist advised during a recent interview.
Executive Summary
IoT Insurance Observatory Director Matteo Carbone envisions a time before the end of the decade when the most advanced insurers will use auto telematics data to support all the functions of their businesses, and when customers protected by connected devices will come to love their insurers, who deliver significant rewards and benefits in addition to insurance coverage that becomes more affordable and available. But getting to this point will require a rethink of marketing messages and agent rewards, he told Carrier Management. The time is right for friendlier processes in the wake of the publication of a series of New York Times articles delivering reports that portray insurers as inquisitive "bad cops" on the hunt to penalize drivers by tying rate hikes to driving behaviors that some customers say they didn't know were being monitored. Related articles by Carbone: The Transformative Potential of Telematics Innovation: Personal Auto (2023) Chloe and Insurance: A Love Affair (2018)Matteo Carbone, director of the IoT Insurance Observatory, sees the changes as part of an evolution of insurers away from the “bad cop” reputations they may have today, moving toward friendlier approaches that will ultimately benefit everyone—because roads will be safer and insurance prices will better reflect risk.
The “bad cop,” penalty-wielding inquisitor image resurfaced recently in a series of articles published in The New York Times by technology reporter Kasmir Hill investigating transparency issues in the collection of driving data from connected cars and smartphone apps. The earliest article in the series, “Automakers Are Sharing Consumers’ Driving Behavior With Insurance Companies” (NYT subscription required), reported the account of a man who had leased a GM car and was never responsible for an accident but saw a double-digit jump in his auto insurance premium two years ago—and quotes from other insurers landing at similar levels. After an insurance agent tipped him off that a report from a global data broker was a factor, he requested the 200-plus-page report to find details of his speeding, hard braking and sharp accelerations during more than 600 driving trips.
While GM told the reporter that data collection happened only for drivers who turned on its connected service plan OnStar and enrolled in a SmartDriver program offering feedback to promote good driving, in the next article, “How G.M. Tricked Millions of Drivers Into Being Spied On (Including Me),” Hill revealed that her own car was being tracked the same way even though neither she nor her husband knowingly enrolled in SmartDriver. (Following the articles, lawsuits were filed against GM and data broker LexisNexis, and GM ultimately ended the SmartDriver program.)
