Brazilian operator Vivo has partnered with Generali Brasil Seguros to market a personalized and flexible monthly car insurance product, called Smart Auto. Through an app, Smart Auto evaluates the customer’s driving style and generates a discount for the contracting of car insurance. A good driver can be rewarded with a discount of up to 30 percent on the price of their insurance.
Vivo customers who take out the insurance have an exclusive benefit: an additional 5 percent discount that is cumulative with the discount earned on driving style. The app also gives driving tips and shares with the insured guidance on how to improve their driving, contributing to safer traffic.
Tarifica’s Take
With the rise of the connected-car sector and the general proliferation of the IoT, there are many opportunities for mobile operators to get involved and discover new revenue streams. This offer from Vivo, in partnership with a Brazilian insurer, creatively utilizes driver data to provide a tailored auto insurance product, with discounts for those users with safe driving habits.
Smart Auto makes good use of new technology and a partnership with an appropriate financial institution to launch a value-added service that stands to make the operator more relevant to its customers’ lives. The operator will be providing something that many of its customers genuinely need, a product that is made possible by the use of mobile technology, not merely tacked on to the traditional services.
However, we feel that there is some danger here with regard to privacy concerns. As cars become rolling computers, they constantly collect data on their drivers and transmit it over mobile networks to third parties. While this is intended to help the auto manufacturers improve their products, and to some extent to help the drivers (as in this case), it has the potential to punish drivers for so-called unsafe driving. That could include higher insurance rates or other impediments and penalties, based on data that is not refined enough. For example, the frequency of sharp braking could be taken as an index of unsafe vehicle operation, but the causes of this behavior will not likely be recorded and taken into consideration.
Vivo is offering a service that could help drivers save money and increase their peace of mind. However, the data collected must be sufficiently detailed, and it must be protected so that it goes only to the places that the drivers and the operator agree upon. Users are understandably worried about privacy, so in order to make this offer work, the operator must guarantee the privacy of its customers’ data. Even if it does that, though, larger concerns about the use of driver data and its implications exist and may not be easy to dispel.