JSMedia – When a car manufacturer decides to enter the insurance business, it should be prepared for many challenges. It should be aware of the risks involved in the business and be willing to work with a partner to help the consumer make the right choice. The company does not directly offer auto insurance but rather white labels services from other companies. Historically, GM sold traditional insurance policies to competitors but dropped them during a financial restructuring in 2008. Today, GM is one of the largest car manufacturers in the world, with its vast pool of customer data and telematics. Because of this, GM will have an edge over insurtech competitors.
GM Enters the Auto Insurance Industry
GM’s onStar business unit will once again enter the auto insurance business by launching OnStar Insurance Services. It will use data from subscribers’ cars and driving habits to determine an individual driver’s car insurance rate. In this way, the company will reward better drivers with lower rates, and the service will operate on a large scale compared to its competitors. Another benefit is that the company will be able to analyze data from its connected cars and the OnStar Connected Service to assess damages after a crash.
4 Advantages of GM Enters the Auto Insurance Industry
As a car maker, GM is entering the insurance business again. The company plans to use its OnStar telematics service to help customers make smarter decisions about their auto insurance. The new telematics system will also be used to determine customer rates and assess damages after a crash. In the first quarter of 2019, OnStar will start providing the OnStar Insurance Services to employees in Arizona. The program will be available to nonemployee customers nationwide by the end of 2021.
1. GM’s onStar brand has empowered customers for more than 20 years
GM’s onStar brand has empowered customers for more than 20 years with the OnStar platform and other services aimed at improving driving safety. OnStar Insurance Services will be the exclusive agent of OnStar Insurance. By leveraging the OnStar technology to tailor the insurance experience for each driver, the company hopes to offer a high-quality, convenient and secure digital experience for consumers. However, it is important to note that this plan will require a regulatory approval.
2. Help Customers Make the Most Informed Decisions
The car manufacturer’s entry into the auto insurance industry is an interesting and competitive threat for incumbent insurers. However, if the newcomers are smart enough to build partnerships with them, the incumbent insurers may benefit from the competition. OnStar Insurance Services is a member of the American Family Mutual Insurance Company. It will have a dedicated insurance division and will help its customers make the most informed decisions. This is a very promising move by the car maker.
3. The Carmaker is Bringing Connected Services in-house
The car insurance industry is experiencing a transformation. More than ever before, consumers can choose from a variety of insurance products and services that suit their needs and budget. In the meantime, the carmaker is bringing connected services in-house. As a result, this will reduce the cost of insurance. In addition, it will be able to offer more diverse policies for a wider range of customers. This change will help the insurance industry become more competitive and consumers will be able to select the best insurance provider.
4. Automatically Send the Data to The Insurer.
The newcomer in the auto insurance industry is bringing a revolutionary approach to the industry. The company’s connected cars will be able to track their drivers’ behavior and automatically send the data to the insurer. By doing so, the company hopes to reduce the costs of car insurance, making it more attractive to consumers. Ultimately, the insurance business is a win-win situation for both consumers and insurance companies.
Conclusion
While GM will be selling their own auto insurance, the company will also offer services for third-party insurers. The new insurance policy will be based on data from their OnStar connected cars. It will also offer discounts for its customers who subscribe to the service. Those who already subscribe to the service will enjoy discounts as well. This will mean that the carmaker will be able to sell their products in a more competitive market.