GM will offer auto insurance using data from connected vehicles

General Motors Relaunches Auto Insurance Division to Generate New Revenue Using Data from Growing Number of Connected Vehicles in the United States

The new business unit will be under the automaker’s OnStar connectivity brand. Starting Wednesday, coverage will be available to approximately 1,000 GM employees in Arizona before being extended to its 85,100 US employees and the general public by the end of next year.

GM previously offered its own auto insurance from 1925 to 2008. The operations generated billions of dollars in annual revenue and contributed $ 400 million to $ 1.1 billion to GM’s bottom line in their final years. operating. Andrew Rose, president of OnStar Insurance Services, declined to disclose earnings forecasts for the new insurance company, but said “the opportunity is huge.”

“GM has already been a major player in this market. We hope that we can once again become a major player in this market, ”said Rose, a veteran of auto insurance who joined the company in January. “Auto insurance is a $ 250 billion market.”

Non-GM owners will be allowed to purchase OnStar insurance, but the automaker will offer additional discounts for those who own GM or subscribe to their services, Rose said.

Part of the discounts for GM owners will be based on drivers allowing the company to monitor their driving habits – a trend among insurance providers. GM is already monitoring this data on some of its vehicle owners, including through partnerships with State Farm and Progressive.

GM said it provides driving information for nearly 19 million trips per day through its Smart Drive program. Since the program launched in 2016, nearly 7 million customers have signed up, according to the company.

Rose said that over time, OnStar insurance rates will be tailored to each owner based on the miles traveled and the type of driving. Factors in determining rates typically include acceleration, hard braking, speed above 80 mph, and the amount of safety equipment installed on a vehicle. Historically, rates were determined based on factors such as education, occupation and credit rating.

“Consumers have chosen, with their consent, to share their driving data with GM,” Rose said. “With this information, we can let you know that you can save money by driving safely or not. And we can offer you coaching over time to become a better and safer driver.

GM does not plan to offer its own home insurance as it previously did. Instead, it plans to partner with current vendors to offer bundled discounts, according to Rose. He said GM plans to expand OnStar Insurance’s offerings over time.

“It’s going to be an evolution,” he said. “We can’t do it all from day one, but it’s one of those things that we think will be better for the consumer, better for society and we hope GM reap the benefits.”