GM stops sharing driver data with brokers amid backlash  March 25th 2024

GM stops sharing driver data with brokers amid backlash

Customers, wittingly or not, had their driving data shared with insurers.

After public outcry, General Motors has decided to stop sharing driving data from its connected cars with data brokers. Last week, news broke that customers enrolled in GM's OnStar Smart Driver app have had their data shared with LexisNexis and Verisk.

Those data brokers in turn shared the information with insurance companies, resulting in some drivers finding it much harder or more expensive to obtain insurance. To make matters much worse, customers allege they never signed up for OnStar Smart Driver in the first place, claiming the choice was made for them by salespeople during the car-buying process.

Now, in what feels like an all-too-rare win for privacy in the 21st century, that data-sharing deal is no more.

"As of March 20th, OnStar Smart Driver customer data is no longer being shared with LexisNexis or Verisk. Customer trust is a priority for us, and we are actively evaluating our privacy processes and policies," GM told us in a statement

JONATHAN M. GITLIN, Automotive Editor at Ars Technica.

New cars are 'the worst' products when it comes to protecting data

With all new car models headed for internet-connectivity, the auto industry is developing a reputation as the "worst" for consumer privacy with driver data.

KEY POINTS

• By 2030, more than 95% of passenger cars sold are likely to have embedded internet connectivity and McKinsey has estimated car-data monetization could deliver $250 billion to $400 billion in annual revenue for industry players by 2030.
• Recent sale of driver data to insurance companies has internet privacy advocates worried, with one analysis recently dubbing cars “the worst product category” ever reviewed for privacy.
• As with many consumer technologies, opting out of data sharing can often be buried in settings and menus that consumers cannot easily find.

So-called connected cars, vehicles equipped with internet access, are becoming the norm, and their proliferation is sounding the alarm for consumer data privacy advocates.

By 2030, more than 95% of the passenger cars sold are likely to have embedded connectivity, according to Counterpoint Technology Market Research. This allows car manufacturers to offer functions related to safety and security, predictive maintenance and prognostics. But it also opens the door for companies to collect, share or sell data related to driving habits and other personal information that people may not want shared.

Most car manufacturers provide options to opt out of unnecessary data sharing, but as with many other consumer technologies where there is money to be made from the sale of data, these settings are often buried within menus, according to Counterpoint senior analyst Parv Sharma. A McKinsey report from 2021 predicted that various use cases for car-data monetization could deliver $250 billion to $400 billion in annual revenue for industry players by 2030.

To be sure, there can be valid reasons to collect driver and car data for safety and functionality purposes, and some essential services, such as emergency and security-related data sharing, may be difficult or impossible to opt out of. Predictive maintenance is among the reasons for more data sharing, allowing manufacturers to determine that a part used in its fleet is failing sooner than expected in order to issue a recall, said James Hodgson, smart mobility and automotive research director at global technology intelligence firm ABI Research.

But there are growing privacy concerns as reports proliferate about car companies sharing driver data with insurers, and as car companies get into the insurance business themselves. One is that driving habits and car-usage details could be reported to data collectors and shared with insurance carriers for rate decisions. That’s not to be confused with the new model of usage-based insurance, offered by companies from Progressive to Root, that offers drivers the potential to earn lower rates if they specifically allow insurers to install devices in cars that track their behavior.

Cheryl Winokur Munk, Journalist

Government Accountability Office Issues Report on Vehicle Information, Technologies and Consumer Choice

Report to Congress examines how changes in vehicle technologies could affect competition and consumer choice in the vehicle repair market

The U.S. Government Accountability Office (GAO) issued its Q&A report, Vehicle Repair: Information on Evolving Vehicle Technologies and Consumer Choice on March 21 in response to a request to examine the issue given pending legislation before Congress. The report, presented to Jan Schakowsky Ranking Member on the U.S. House Subcommittee on Innovation, Data, and Commerce of the Committee on Energy and Commerce.

The GAO was asked to review the effects of changing vehicle technologies on vehicle right-to-repair. This report examines how changes in vehicle technologies could affect competition and consumer choice in the vehicle repair market and The Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) and Federal Trade Commission (FTC) actions on this issue.

The GAO identified four key takeaways in its research for the report stating:

• Most automakers have been operating under a 2014 voluntary right-to-repair agreement that generally resulted in independent repair shops having access to the information, data, and tools needed for repairs. However, stakeholders we interviewed, and a nongeneralizable review of a set of complaints, suggest independent repair shops may face some access limitations.
• Advanced vehicle technologies may make repairs more expensive and complex because they require additional knowledge, equipment, and other investments. Such issues could particularly affect some independent repair shops that are unable to make such investments.
• In addition, according to some independent repair stakeholders, the wireless transfer of data between vehicles and automakers may disadvantage independent repair shops compared to dealerships.
• If independent repair shops face limitations in access to the information, data, and tools needed for repair, consumers might have fewer repair choices. If independent repair shops face disparities in access, it could make repairs more expensive or inconvenient for some consumers.
• FTC is taking steps to better understand potential vehicle repair limitations by considering new ways to categorize and analyze potentially relevant consumer complaints.

State Farm Discontinuing 72,000 Home Policies in California in Latest Blow to State Insurance Market

State Farm will discontinue coverage for 72,000 houses and apartments in California starting this summer, the insurance giant said this week, nine months after announcing it would not issue new home policies in the state

The Illinois-based company, California's largest insurer, cited soaring costs, the increasing risk of catastrophes like wildfires and outdated regulations as reasons it won’t renew the policies on 30,000 houses and 42,000 apartments, the Bay Area News Group reported Thursday.

“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,” the company said in a statement Wednesday.

“State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws,” it continued. “It is necessary to take these actions now.”

California property insurance markets to continue facing pricing and availability pressures: ALIRT - Reinsurance News

With State Farm General Insurance Company (SFGIC) announcing it will be exiting more California property risks starting in mid-2024, ALIRT Insurance Research has noted that state homeowners and commercial property insurance markets will likely continue to face pricing and availability pressures.

SFGIC’s recent pull includes approximately 30,000 largely non-commercial risks and 42,000 commercial apartment policies.

This follows the firm’s announcement in May 2023 that it was suspending new California non-auto property and casualty business, citing exposure-related issues and a challenging reinsurance market environment.

Writing in a press release, SFGIC stated that it is taking these steps new to “ensure its long-term sustainability in California”, inculpating economic inflation, catastrophe exposures, reinsurance costs, and regulatory impediments.

Insurers Report Rising Hail Damage Claims - The New York Times

Inflation is driving up the cost of materials and labor to repair roofs and cars. Adding to insurers’ costs is increased development in areas affected by severe storms.

In an illustration, a blue person and a blue dog ride in a red car. Both are wearing yellow helmets. And the car has a yellow helmet as well, with large hailstones falling on it.

Golf balls, tennis balls, softballs. All sound like the stuff of fun games — except when they are used to describe the size of the hailstones that often accompany severe thunderstorms.

Those hailstones can cause significant damage to homes and cars, a growing worry as warming temperatures fuel more destructive storms. This month, baseball-size hail, sometimes called “gorilla hail” because of its heft, was reported in Kansas and Missouri.

The insurance industry reported $60 billion in losses from “severe convective storms” — a catchall name for thunderstorms that may spawn hail, heavy rain, lightning, high winds and tornadoes — last year, said Mark Friedlander, a spokesman for the Insurance Information Institute, a trade group. In 2022, the industry reported $31 billion in losses.

Data from the National Oceanic and Atmospheric Administration’s Storm Prediction Center show 5,879 reports of hailstones of one inch or larger in 2022, up 17 percent from 5,020 in 2021. Preliminary data for 2023 show 6,962 reports, including a significant increase in reports of very large hailstones of two inches or more.

Convective storm losses may reach hundreds of millions of dollars: Aon

A severe convective storm outbreak across the central United States on March 12-16 caused widespread property and infrastructure damage, with the aggregated impacts potentially driving economic and insured losses into the hundreds of millions of dollars, according to a report Friday from Aon PLC.

The damage was primarily due to violent tornadoes and large hail, according to the report. Reports include two violent EF-3 tornadoes in Ohio and Indiana responsible for three deaths, nearly 70 injuries, and considerable property damage.

The most prolific outbreak of severe weather occurred on March 14 into early March 15, with nearly 450 storm reports submitted to the Storm Prediction Center, the report said.

Severe weather spanned the region from Texas to Ohio with storms producing strong wind gusts up to 75 mph and very large hail, particularly in the St. Louis metro area as well as Oklahoma, Arkansas, Indiana and Ohio.

The largest reported hailstone from this event measured 5.25 inches in diameter and was discovered near the town of Ada, Oklahoma.