NEW YORK – Allstate said improved technology will eventually give the auto insurer a chance to boost revenue by selling customer driving data, much as Google Inc. profits by collecting information on those who use its search engine.
“There are lots of people who are monetizing data today,” Allstate Chairman and Chief Executive Officer Tom Wilson said Thursday at a conference in New York held by Sanford C. Bernstein & Co. “You get on Google, and it seems like it’s free. It’s not free. You’re giving them information, they sell your information.”
Wilson is preparing for a future of autonomous vehicles that ferry passengers and are safer than current fleets. While a lower frequency of accidents may limit demand for insurance, Wilson said that Allstate can adjust to technological improvements.
Insurers are increasingly using data on customer habits to help analyze risks and set prices. The records could also be valuable to advertisers who want to know where potential customers travel and what hours they’re on the road.
“Could we, should we sell this information we get from people driving around to various people and capture some additional profit source and perhaps give a better value proposition to our customers?” asked Wilson, whose company is the largest publicly traded U.S. auto insurer. “It’s a long-term game.”
While some drivers may not initially like the idea of their insurers collecting more data, that unease would tend to dissipate when people are offered discounts, Wilson said.
“We’re not seeing any huge consumer pushback,” he said. “You’ll see a rapid uptake when the pricing technology is right.”
Wilson joins Glenn Renwick, the CEO of Progressive Corp., in assuring investors that the industry can adapt. Renwick said in 2013 that better data can be used by underwriters to design policies.
“It gives us some very direct insight to the vehicle,” Renwick said. “That gives us opportunities to think about things differently, what might be insurable.”