Listed below are the key regulatory trends impacting the connected cars in insurance theme, as identified by GlobalData.

Cyber criminals have higher chance of accessing individual’s data as cars become more autonomous and connected. Cyber insurance opted by car manufacturers will need to cover the cost of recovery of data and extortion payments in case of a cyberattack.


The US’ Internet of Things Cybersecurity Improvement Act was introduced with the goal of implementing legislative action around the emerging technology. The bill outlines minimum security standards that must be adhered to for any internet of things (IoT) devices the federal government uses, which includes those of telematics service providers.

The UK government launched the Future of Transport consultation in 2010 to help understand mobility as a service. The government allocated $1.7m to government agency Zenzic to research self-driving vehicle cybersecurity feasibility along with this consultation. Cybersecurity will remain one of the biggest challenges for governments to overcome in order to create confidence in connected vehicle technology and help autonomous vehicles become widespread.

Data protection

The European Union passed the General Data Protection Regulation (GDPR) in May 2018, which address issues on how personal data should be used and transferred between the EU/European Economic Area and the rest of the world. GDPR created a legal framework that establishes security features on how consumer data should be stored and kept safe, as well as implement guidelines for businesses to disclose how they are using consumers’ personal details.

GDPR has become the model for other countries’ data protection laws since its implementation, including Chile, Japan, Brazil, South Korea, Argentina, and Kenya. The California Consumer Privacy Act, which was adopted in June 2018, also emulates many of the legal frameworks GDPR implemented to protect consumer data.

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Another country that is pushing forward with data protection rules is Australia, which reformed the Privacy Act of 1988 in December 2020. Australia’s reforms are aimed at securing citizens’ data from breaches as well as implementing fines of up to $10m for failing to do so. Data protection regulation will be key both in terms of protecting consumer data and defining how companies can use this data for profit.

Open finance

The Financial Conduct Authority launched a consultation in December 2019 to understand the risks and opportunities offered by open finance in the UK. Similar to open banking, open finance refers to the ability for consumers to share their personal financial details with corporations of their choosing. This would mean consumers would be able to share personal information or risk profiles an insurer might already have on them with another insurer or third-party company.

Open finance at this level will ultimately make it easier for consumers to switch providers and try to identify the cheapest possible premiums. Open finance, however, is still being reviewed by the Financial Conduct Authority, with no clear indication if or when open finance in insurance will become a reality.

This is an edited extract from the Connected Cars in Insurance – Thematic Research report produced by GlobalData Thematic Research.