I’m thrilled to sit down with Simon Glairy, a renowned expert in insurance and Insurtech, who brings a wealth of knowledge on risk management and AI-driven risk assessment. With automakers stepping into the insurance arena, Simon offers unique insights into how these shifts are reshaping the industry. Today, we’ll dive into the impact of OEM-led insurance programs, the evolving consumer sentiment around data sharing, the competitive dynamics between automakers and traditional insurers, and the critical role of trust in this changing landscape.
How do you see automakers entering the insurance space influencing the traditional ways people buy auto coverage?
It’s a game-changer, really. When automakers like Honda and Tesla start offering insurance, they’re not just selling a policy; they’re embedding it into the vehicle ownership experience. This could disrupt traditional distribution models by cutting out some middlemen, like independent agents, and offering policies right at the point of sale. It challenges the status quo of how insurance has been marketed and sold for decades, pushing the industry toward a more integrated, seamless approach.
What specific hurdles do traditional insurance companies face with this new kind of competition?
Traditional insurers are up against a unique competitor with automakers. OEMs have direct access to customers at the dealership and can leverage real-time vehicle data for pricing, which gives them a significant edge. Insurers might struggle with higher customer acquisition costs and less personalized offerings if they can’t match that level of integration or data-driven customization. They’ll need to rethink their strategies to stay relevant.
How might these changes reshape the bond between insurers and their policyholders?
The relationship could become more transactional if OEMs dominate with convenience and lower costs. Traditional insurers risk losing that personal touch if customers start seeing insurance as just another car feature rather than a standalone service. On the flip side, this could push insurers to focus on building stronger connections through better customer experiences or by partnering with OEMs to co-brand offerings.
What advantages do customers gain when automakers tie insurance directly to vehicle ownership?
Customers stand to win big here. When insurance is linked to the car, it often means a more streamlined process—no shopping around or dealing with separate entities. Plus, automakers can use actual driving data to offer tailored premiums, which could mean lower costs for safer drivers. It’s also about convenience; imagine sorting out your insurance while signing the papers for your new car. It’s all in one place.
How does real driving data contribute to fairer or more personalized pricing for drivers?
Driving data, collected through telematics, paints a clearer picture of risk. Instead of relying on broad factors like age or location, insurers—or in this case, automakers—can assess how someone actually drives. Speeding habits, braking patterns, mileage—all of that can factor into pricing. For safe drivers, this often translates to lower rates because the pricing reflects their real behavior rather than a generic risk profile.
What does recent consumer sentiment reveal about comfort levels with sharing driving data for insurance purposes?
Recent surveys, like the one from 2024, show a noticeable shift. More drivers—around 43%—are now very comfortable sharing their driving behavior data with insurers if it means potential discounts, up from just 36% the year before. It suggests people are starting to see the value in data sharing, especially when it’s tied to tangible benefits like cost savings. But there’s still a learning curve and some hesitation to overcome.
Why do you think more drivers are warming up to the idea of sharing their driving behavior with insurers?
I think it’s largely about awareness and perceived value. As people learn that sharing data can lead to personalized pricing and rewards for safe driving, the tradeoff feels worth it. There’s also a growing familiarity with connected technology in everyday life—think fitness trackers or smart home devices. That normalizes the concept of data sharing, especially when drivers see it as a way to gain control over their insurance costs.
What are some lingering concerns about data sharing, and how can the industry address them?
A lot of folks still worry that their data could be used against them—like facing higher premiums for minor infractions or having their privacy invaded. There’s also a general unease about who else might access that information. The industry can tackle this by being upfront about how data is used, ensuring it’s only for pricing or safety benefits, and giving customers clear opt-in choices. Transparency and control are key to easing those fears.
How does giving drivers influence over factors like their driving habits change their perception of insurance costs?
It’s empowering. When drivers know their habits—like avoiding hard braking or sticking to speed limits—can directly lower their premiums, insurance feels less like a black box and more like something they can manage. It shifts the narrative from being priced on things they can’t control, like demographics, to behaviors they can adjust. That sense of agency often builds trust and makes costs seem fairer.
How do you envision OEM insurance programs altering the competitive landscape between automakers and established insurers?
These programs are sparking a new kind of rivalry. Automakers can offer policies right at the dealership, using vehicle data for hyper-personalized pricing, which is tough for traditional insurers to match without similar access. It’s pushing everyone to up their game—OEMs are innovating with embedded services, while insurers are looking for ways to collaborate or adopt similar tech to stay in the race. Ultimately, this competition drives better options for consumers.
What edge do automakers have when they offer insurance directly at the point of purchase?
The biggest advantage is convenience. Buying insurance at the dealership, bundled with the car, eliminates extra steps for the customer. Automakers also have direct access to vehicle data through built-in telematics, allowing them to craft policies tailored to the driver from day one. It’s a seamless integration that traditional insurers often can’t replicate without partnerships.
How can traditional insurers partner with OEMs to maintain their foothold in this evolving market?
Collaboration is the way forward. Insurers can team up with OEMs to co-brand insurance products or act as underwriters behind the scenes, leveraging the automaker’s customer access and data while bringing their own expertise in risk management. Sharing telematics data can also help insurers enhance their underwriting and create more competitive, personalized offerings. It’s about finding a win-win.
Why is trust such a vital factor when customers choose an insurance provider, especially with OEMs as newcomers?
Trust is everything in insurance because you’re dealing with people’s financial security and personal data. Surveys show it’s a top reason—44% of drivers say it’s why they pick a provider. For OEMs, entering this space means they have to prove they’re not just car makers but reliable stewards of risk and privacy. Without trust, even the best pricing or tech won’t win customers over.
How can a well-known automaker brand help establish credibility in their insurance offerings?
A strong brand carries weight. If an automaker is already known for quality and reliability in their vehicles, that reputation can spill over into insurance, giving customers a sense of familiarity and confidence. They can lean on that goodwill to assure buyers that their policies are just as dependable as their cars, especially if they emphasize transparency and value.
What is your forecast for the future of OEM-led insurance programs in the next decade?
I see these programs growing significantly as more automakers jump in and telematics become standard in vehicles. We’re likely to witness even more dynamic pricing models, real-time driver feedback, and bundled services like predictive maintenance or emergency response. The line between mobility and insurance will keep blurring, and the winners will be those—whether OEMs or traditional insurers—who prioritize personalized experiences and build unshakable trust with customers.
