Allstate CEO: Customers place telematics discounts over privacy; selling driving data an optionBy on
Insurance | Market Trends | Technology
Customers’ concerns about privacy take a back seat to their desire to save through telematics, Allstate CEO Thomas Wilson said last week in a presentation that raised the idea of not just collecting driver data but selling it.
Wilson, who spoke at the Bernstein 2015 Strategic Decisions Conference on May 28, gave the example of Google as a model for what Allstate could do with user telematics data.
“There are lots of people who are monetizing data today,” Wilson said. “… They (Google) sell your information, which pays for the data scientists and the servers and that kind of stuff.
“Well, could we, should we sell this information we get from people driving around to various people and capture some additional profit source and perhaps give a better value proposition to our customers than we’re giving today? So … it’s a long-term game. We’re investing heavily in telematics.”
He said that so far, nobody has seemed to mind Allstate collecting data from the 750,000 people using DriveWise and Esurance’s DriveSense.
“We’re not seeing any huge consumer pushback on it,” Wilson said.
When surveyed, “some people worry about the consumer pushback on privacy,” Wilson said. But their opinion is easily swayed, he said:
“‘How about if I give you a 10 to 20 percent discount?’
Wilson was bullish about the technology, calling it “as powerful as credit was” when actuaries started using it in the 1990s to forecast driver performance.
“I think that everyone will have to follow suit just like they did on credit,” he said.
In January, we discussed some of the concerns with telematic data usage by insurers and companies like General Motors, which tried to collect OnStar data from nonsubscribers and backed off after a backlash (see MSNBC coverage here). See Repairer Driven News’ earlier coverage here.
Collecting and selling driver data already kind of happens, even without a gadget plugged into your OBD or a cellphone app tracking your driving (which Wilson said could be the next step). CLUE has the last seven years of claims history for many drivers accessible to any insurer, according to InsuranceQuotes. This data even includes the act of simply asking insurers about a claim — which can also increase your rates.
For collision repairers, privacy issues surfaced in 2012 when the Society of Collision Repair Specialists, Automotive Service Association and Alliance of Automotive Service Providers pressed the Audatex, CCC and Mitchell estimating services to give users the ability of opting in or out of their data being used for other purposes. See the responses from Audatex, CCC and Mitchell.