GM’s OnStar teams with Progressive for driver discounts
General Motors Co.’s OnStar subsidiary will offer motorists a new service this summer that gives feedback on their driving skills and allows some to seek driving-based discounts from Progressive insurance.
OnStar, which provides emergency, security and embedded Wi-Fi connectivity services to 7 million subscribers in North America and China, will allow U.S. customers to enroll in a driving assessment. After 90 days, OnStar technology that connects with the vehicle will tell customers how they performed in certain driving metrics, comparing them against an aggregate of other enrolled customers and offering individualized driving tips.
That’s not the only innovation announced by GM on Sunday: At the Consumer Electronics Show in Las Vegas this year, OnStar will preview a service connecting drivers with businesses along their route. And Chevrolet vehicles will be able this year to warn drivers when certain parts need service.
GM said some OnStar customers can choose to share their driving data and evaluation with Progressive, the first insurance company that will use OnStar data. And through Progressive’s Snapshot program, those customers could be eligible for an insurance discount.
“The beauty of this program is that control is in the hands of the customer,” Greg Ross, director of business development and alliances for GM’s Global Connected Consumer Experience, said in a statement. “If they wish to participate, we’ll inform them of their driving behavior and then they’re able to choose if they want to share their information with Progressive.”
But some privacy advocates are concerned with the amount and type of data companies and insurers are collecting, and how they will use that information. There are also concerns about information security and ultimately who will own the data collected. GM and OnStar stressed the program is voluntary and only for consumers who consent.
GM this year began offering embedded OnStar 4G LTE Wi-Fi access in most 2015 GM vehicles sold in the U.S. and Canada.
AutoTrader.com senior analyst Michelle Krebs said Sunday that GM is turning “what-if” opportunities with connected cars into realities.
“A couple of the biggest challenges in advancing the connected car and ultimately autonomous cars are the regulatory and insurance issues,” Krebs said. “GM’s partnership with Progressive will be valuable in gathering useful information that potentially demonstrates the higher level of safety of connected vehicles since safety has been questioned as more technology is added to vehicles.”
The OnStar assessment program is expected to be available on all 2016 GM models, most 2015 models and some 2013 and 2014 models starting this summer.
Progressive’s Snapshot program, a type of usage-based insurance, provides insurance discounts of up to 30 percent. Safe drivers enrolled in the program save an average of $150 a year, according to Progressive. Drivers receive a device that plugs into their vehicle’s on-board diagnostic port that measures how, how much and when they drive their vehicle. Progressive said more than 1 million customers have participated.
“Providing drivers with feedback benefits consumers by making them more aware of their driving behavior, saving them money and keeping the roads safer,” said Dave Pratt, general manager of usage-based insurance at Progressive, in a statement. “This program makes it easier than ever for consumers to take advantage of the latest in-car technology and the leading usage-based insurance program.”
The National Association of Insurance Commissioners says usage-based insurance is set for rapid growth in the U.S. It cites experts that predict up to 20 percent of U.S. vehicle insurance will use some type of usage-based metrics within five years.
OnStar customers now can receive low mileage discounts through some insurance companies such as State Farm. In the voluntary mileage program, OnStar provides verified mileage reports — not driver assessment data — to the insurance company and customers receive discounts for being low-mileage drivers.
GM has said it sees many opportunities to boost revenue through connected vehicles by working with other companies in areas such as helping customers access fuel, parking, travel or hotel information. Some industry analysts see OnStar as a revenue boon for GM. In 2013, IHS Automotive estimated 4G LTE could add $400 million gross profit to GM by mid-decade.
Connected vehicles also could help lower warranty costs for automakers, as software could be updated automatically.
AtYourService, the other OnStar offering announced Sunday, will be available to its U.S. and Canadian customers. It will connect drivers with information and deals at retailers and merchants along their route. GM said RetailMeNot and Entertainment Book will supply coupons; it selected Parkopedia for parking spot assistance and Audiobooks.com will provide e-books.
GM also has partnered with Dunkin’ Donuts and Priceline.com. When drivers request directions to a place with a deal, an OnStar adviser can send them the incentive.
OnStar advisers also early this year will be able to locate hotels and book reservations for full-service OnStar subscribers through Priceline. OnStar will send directions to the vehicle and customers will receive an email confirming reservations.
GM also said Chevrolet this year will offer a predictive service to alert drivers when certain vehicle parts need service. The service will work with the OnStar 4G LTE connection and data streams from vehicle sensors.
“We can actively monitor vehicle component health and notify our customers if covered vehicle components need attention,” Alicia Boler-Davis, GM’s senior vice president of Global Connected Customer Experience, said in a statement. “Nobody else in the industry can offer this.”
Initially, the technology will focus on the battery, starter motor and fuel pump, but Chevy said it will add other parts and components in future years. GM’s Chevrolet brand will make the service available on certain 2016 models, with more vehicles added throughout the 2016 model year.
Beginning next year, Chevrolet customers with an active OnStar connection, will be able to check things such as their vehicle’s tire pressure, oil life and other data continuously. Now, they access that information through a monthly email as well as through the OnStar RemoteLink smartphone app.