General Motors is moving into the car insurance market with its OnStar brand, promising lower flexible rates for drivers who demonstrate safe habits behind the wheel.
“We aim to be an industry leader, offering insurance in an innovative way,” Andrew Rose, president of OnStar Insurance Services, said in a statement on Wednesday (Nov. 18).
GM’s OnStar Insurance Services will partner with insurance carriers to offer products that remove “biased judgment” by focusing on factors that are within customers’ control. Insurance rates will be based in part on subscribers’ driving data, which is collected using the integrated OnStar in-car telematics system. Vehicle usage will be considered and safe driving habits will be rewarded.
Using the latest technology and data analysis, the service will provide customers with personalized insurance rates and recommendations for smarter driving habits.
“This makes it a much fairer process. If you are a good driver, you can save a ton of money. And it helps make the roads safer,” Rose told Wards Auto.
The new insurance will initially launch in Arizona to GM employees in the fourth quarter of this year, with plans to expand to the public in 2021.
Insurance policies sold through OnStar Insurance Services will be underwritten and issued by member companies of the American Family Mutual Insurance Company.
OnStar Insurance Services is the first insurance firm connected to an automobile company to use telematics and 4G LTE technology for driver discounts. The service will leverage the trove of driver data already available to OnStar through 150,000 daily calls and 6,000 monthly crash responses, Rose noted.
“… we have more data than the rest of the industry combined,” he told Reuters.
Rose added that the company still must face individual states’ regulatory hurdles, and insurance commissions are still grappling with the use of detailed driver data to calculate rates.
In-dash smart screen technology is a game-changer for connected car commerce. PYMNTS’ Digital Drive Report found that connected car commerce is a $230 billion opportunity.