US-based automotive manufacturer General Motors (GM) is reportedly planning to launch an algorithm-based auto insurance plan by the end of the first quarter in the US.

The scheme, which is planned to be launched in some US states, would allow policyholders to be charged based on their driving performance, reported Reuters citing a company executive as saying in an interview.

Currently, GM’s subsidiary OnStar, together with its insurance partner American Family, are seeking regulatory approval for the proposed data-based insurance plan in Arizona, Illinois and Michigan.

OnStar Insurance president and GM global innovation vice-president Andrew Rose was cited by the news agency as saying that the new insurance plan is expected to receive permit at the end of March 2022.

Rose added: “We hope to follow that with a dozen, two dozen and hopefully more states.”

GM’s new policy, however, currently excludes the driver-assistance systems, as they help in the automation of certain driving task.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In future versions of the insurance plan, sensor data from GM’s “Super Cruise” system such as in-cabin camera, could be considered for rate setting, added Rose.

He further noted: “I’m very excited about what we have in market and its ability for us to show benefit to the insurance equation.”

Although behavior-based auto insurance has been available since several years, consumers are required to plug a data recorder into the car or download a mobile application.

For reliable and consistent data, GM plans to collect acceleration, braking and general usage data directly from the car, Rose noted.

The firm would provide an upfront discount to customers, who are considered safe drivers by the company, if they choose data collection under the new plan, according to Reuters.

By 2030, GM aims to generate insurance revenue of $6bn with average annual auto premium costing at around $1,000 in the US.