Global auto insurers have started to promise to lower your rates when it comes to the essential car coverage – but there’s a catch: they want you to allow airplane-style black boxes to monitor your driving.
Analysts and industry observers forecast that numerous smartphone applications and devices that can track how and where you drive will enter the auto insurance segment at a rapid pace – as they come with the promise of discounts that can reach 30%. Consultancy Oliver Wyman predicts that driver data could set the price for the future car insurances and the business could jump as much as 40% each year to a $3.6 billion market by 2020.
They might not even be optional soon, as legislators around the world push for autos that are equipped to receive, gather and transmit data – the so called V2V (vehicle to vehicle) and vehicle-to-environment communication, so “motor insurance will by definition need to change,” comments Domenico Savarese, the leader of vehicle-data efforts at Zurich Insurance Group AG – a company that covers around 15 million drivers in as many as 30 countries. It certainly looks like the shift from the traditional practice of providing coverage based on age and driving history is actually unavoidable – insurers will know what you’re doing when driving and customers get lower rates, a faster response time in the event of an accident and other features.