Canadian Underwriter

Video-based telematics? Car subscription services? The future of auto insurance is already here

April 23, 2021   by Jason Contant

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Increased use of video-based telematics in the commercial fleet space, as well as the evolution of car subscription services, are just two ways in which the Canadian insurance market could change over the next few years.

Panellists discussed their predictions for the personal and commercial lines markets Friday at the virtual InsurTech North conference, hosted by MSA Research.

Sabina Martin, senior product manager at Oakville, Ont.-based GEOTAB (a commercial fleet telematics company), said she sees video-based telematics “really taking off” in the near future. While telematics devices measure driving behaviours such as speed and hard braking, video can add a whole new dimension to the situation.

“Harsh braking [could] be both a good and bad thing, but video brings the context to which one it is,” Martin said by way of example during the Insuring the Future of Mobility session. For example, video could tell “whether you were swerving to avoid someone who completely cut you off, or [whether] you were [hard braking] because you weren’t paying attention.”

In the commercial lines fleet space, many of GEOTAB’s customers have already invested in video-based telematics, “and if they haven’t, they’re looking to invest,” Martin reported.

Clockwise from top left: Moderator Ryan Spinner, head of mobility at Liberty Mutual Canada; Sabina Martin, senior manager, product, GEOTAB; Fernand Vartanian, general counsel, Onlia; and Katie DeGraaf, global health of products and telematics, OnStar Insurance, General Motors, speak at InsurTech North.

She is also curious to see if the digitization of telematics sales takes off. “We know companies like Volvo are looking to sell their cars only online,” Martin said. “It’ll be interesting to see if that takes off from a telematics perspective. When you go to a dealership, are you…going to be able to use some kind of panel where you can purchase telematics right then and there?”

Fernand Vartanian is general counsel with Onlia, an online direct home and auto insurance company for Ontario consumers. He provided his predictions for the personal lines market over the next two to five years during the webinar.

“Look for a comeback in Ontario of the Driver’s Policy,” Vartanian said, referring to a policy in the 1960s that “basically allows you to have benefits of auto insurance without actually owning a vehicle.”

He also sees car ownership changing, something that the COVID-19 pandemic has really expedited. “People are looking to not necessarily own a vehicle or enter into a long-term lease, so I see subscription services. So, if you subscribe to Netflix…why can’t you subscribe to a vehicle that has zero commitment, other than over 30 days, because of regulations?” Vartanian asked.

Onlia is partnering up with some subscription services for vehicles as well because it has found Millenials and other relatively young drivers want vehicles on a more short-term basis.

Other predictions for the future include:

  • Home and auto insurance becoming an ancillary product. For example, auto insurance premiums being wrapped into lease payments, or home insurance wrapped into mortgage payments or condo fees. “We really are trying to strike some partnerships now… at the point of sale of a vehicle or a home, and see how insurance can be an ancillary product at that point of sale,” Vartanian reported. “I really think that’s an evolving area.”
  • More movement with self-driving vehicles. “We’ve got to figure out how to rate that,” Vartanian said. “How how does insurance work in that case? We are actively engaging to see how we can start evolving our premiums to be more refined and see how autonomy plays into that.”
  • Embedding of video and driver panels on the vehicle itself
  • Autonomous traffic management platforms
  • Increased ability to document crash scenes, estimate fraud and damage, and determine whether the consumer needs a repair or not. In addition, tools for better decision-making around roadside assistance, towing, and whether the client needs a rideshare or rental vehicle.

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