Why consumers may be snubbing telematics

Privacy and security concerns may be contributing to a lower-than-expected uptake of telematics programs, Andrew Lo, the president and CEO of Kanetix Ltd., said on Monday.

Also, there seems to be some confusion among consumers about the data insurers are collecting, and the reasons for which insurers are requesting the data.

In a recent Kanetix consumer survey on connected technologies and data sharing, fifty per cent of the 1,000 respondents indicated they most likely to share home (such as alarm and flood) and medical information with their insurer via technology, whereas only 46% said they were willing to share lifestyle habits and driving information.

Lo told Canadian Underwriter that he believes there is less willingness to share driver data compared to home and medical information because consumers are not clear about what they are sharing, how it’s going to be used, and what value they get after being asked to opt in to a telematics program (beyond saving a small amount on insurance, for example).

“When you wear a fitbit and data goes to the cloud for analysis, consumers are clear what they are getting – a path to better health,” he said.

With telematics, on the other hand, consumers may not realize “there may be benefits to increased data collection and sharing with their providers, such as lower premiums,” Lo said in a press release. “An important question for consumers and industry today is, what are they willing to share electronically in order to save costs on their insurance?”

Lo pointed out that about 35% of survey respondents were concerned about the security of data, with women more concerned than men (37.4% of females versus 32.6% of men). “I think reinforcing and reiterating the fact that this information will be used for insurance purposes only is the key,” Lo said. “It’ll become more imperative for insurers to position themselves as someone consumers can trust.”

Transparent communications, frequent education on what information drivers are sharing and why it’s important to share that information can help establish that trust, Lo said. “At this point maybe investing in resources that ensure data security and communicating the same effectively to consumers will help send the right message to consumers.”

The survey found there was a general acceptance of new automotive technologies collecting driving-related data. Sixty per cent reported being comfortable with their car transmitting location and vehicle data tracking, and 58% reported they were comfortable with augmented reality or heads-up displays where speed and navigation, for example, appear on the driver’s windshield.

A majority of survey respondents were also not comfortable with autonomous vehicles (59%). The most accepting of autonomous vehicles is the 18-to-34 age demographic at 55%, versus 30% of respondents aged 45 and older. (The survey was broken down into three age groups: 18-34 (309 respondents), 35-44 (221 respondents) and 45+ (470 respondents).

The over-45 age group are less likely to share data in general. Lo said that when he interviewed Millennials at the National Insurance Conference of Canada, the perception was that personal data is being shared with Google through search and on smartphones.

“I think the younger demographic may be more accepting of this as part of daily life,” he said. In an increasingly connected environment, with GPS, smartphones and social media, “data is constantly being shared to the cloud and the perceived privacy of information is blurred.”