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Connected insurance; safety boon or anti-consumer nightmare?

American Family Insurance has recruited the help of US telematics firm Automatic to fit policy holders’ vehicles with on-board diagnostics (OBD) dongles to collect and monitor driver data – with the primary benefit of lower insurance costs for consumers. This looks like a pro-consumer move on the surface, but in the long run, insurance players will have unprecedented access to a vast quantity of driver data, which they will almost certainly use to their advantage – manipulating this valuable data to reduce the number of claims payouts. This may come across as an alarmist view, yet the insurance industry is already in the process of transitioning to this type of data-driven business model, and this week’s deal is just one…

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