Auto insurance may be on the brink of an incursion from mobile-phone and technology companies, Bloomberg reports.
The news service reported that Telefonica SA’s O2 unit — one of the first mobile operators in Britain to offer car insurance — expanded its product line in February to include telematics boxes tracking people’s driving habits, a move that can lead to cheaper premiums for younger drivers. “That’s stoking speculation that a wave of fintech companies will push into the market and disrupt the way insurers interact with customer,” Bloomberg’s Rebecca Penty and Oliver Suess reported.
Cell-phone or Internet companies could, for example, use the massive amount of data they hold on their customers to sell them car insurance, bypassing traditional brokers and price-comparison websites. Alphabet Inc.’s Google entry into price comparisons last year failed, but analysts say the web giant could come back and have another go.
“No doubt Google will figure out a way to come back,” Christopher Ling, a regional leader at Capgemini SA’s insurance practice for the U.K. and Europe, told Bloomberg. “For O2, it’s more dipping a toe in the water at the moment. Other ideas could be using mobile-phone data for home and health monitoring and the insurance associated with that.”