This is not a new topic; I was writing about it back in 2016 when Ford, GM and Tesla were all planning to offer insurance. Insurance is a complex and highly regulated business though and only Tesla continues to offer insurance directly but has a limited market impact currently.

Electric vehicles and emerging autonomous ones are where the real-time data is generated which is one reason OEMs target subscription services.

“ Beyond improving basic functions of the vehicle, carmakers have been drawn to the potential of software to deliver more revenues through collection of user data and offerings of subscription services that come with a monthly fee for insurance, servicing and repairs. The monetisation aspect is particularly appealing for companies grappling with higher development costs and lower margins for EVs.”

Kana Inagaki in London, and David Keohane in the   Financial Times 23rd Sep 2024

It is tough though. At the start of 2025, France’s Renault cancelled plans to list shares in its new EV and software business amid slowing growth in battery-run car sales worldwide. But the Ampere unit remains on track to launch its first software-defined vehicle — which its chief executive Luca de Meo has described as “a mobile phone on wheels” — in 2026. It also aims to generate 40% of the profit generated by the car over its life cycle from software by 2030, compared with the current 10%

OEMs might well be the original data generators but households rarely own just one car.  Even if the OEM offers insurance and repairs for the vehicle they manufacture how can they do the same for competitor's vehicles? 

Motor insurers and MGAs can deliver the entire value-chain of insurance from underwriting through policy personalization to claims handling and repair networks. But what about that real-time data? 

OEMs are the source of the richest data- in fact,  more than is needed. But they can even trigger calls to emergency services, triage claims, and organise repairs when a road traffic accident is recorded. Carriers can achieve the same using smartphones and the many software solutions on offer. 

Insurers have been experimenting with telematics to customise products and develop new ones for a decade or more. Their digital maturity is increasingky effective even though held back by legacy technology and inflexible & complex core systems of record.  

Vehicle OEMs are still largely ‘metal-bashers’ even if very advanced ones. The exceptions are Tesla and the wave of Chinese manufacturers which have, with state support, invested in the whole ecosystem to build electric vehicles (EVs).  They are solely focussed on EVs and the drive to autonomous vehicles whilst US and European manufacturers still make and deliver internal-combustion powered vehicles.  That means Chinese OEMs are digitally more advanced than competitors illustrated by the chart below.

Insurers can leverage their digital capabilities grown over the last decade. Rory Yates in Insurance Edge writes about a UK development that could be the catalyst for insurers and OEMs to collaborate.

This is "a major overhaul that will affect buyers of brand-new cars specifically. The traditional insurance group ratings for new cars are to be replaced by a new scheme called ‘vehicle risk rating’.

Coming into effect for new cars registered after August 1, 2024, it aims to enforce assessment of five risk areas, providing individual category scores for performance, damageability, reparability, safety, and security.

This means that unlike the old “group rating” system, which was set at the car’s launch, the new “vehicle risk rating” can go up and down over time, increasing or decreasing its insurance costs in the process."

Read the full article here

To answer the question in the title- back to Rory Yates.

“Ultimately the immediate hope is that this will not only help insurers price premiums more accurately, but it could encourage manufacturers to consider insurance outcomes when designing vehicles and implementing technologies. Better collaboration between the two industries is long overdue. ”

That will require insurers breaking out of the constraints imposed by legacy technology. And, in particular, enhancing data management with automation tools and AI in all its guises from extractive to GenAI. See the linked articles below.

Further Reading

Surveys highlight data maturity holding back AI deployment ambitions

How technology in claims processing is changing consumer choices in insurance

Can insurers be 'friends' whilst raising premiums and not renewing some policies?