Telematics: brokers seek to defend their clients

Longueuil, QC (Apr. 11, 2014) – In light of the rapid growth of telematics technology, which is used to collect and send information to insurers utilizing usage-based auto insurance (UBAI), brokers have undertaken to protect their clients’ interests so that the benefits of this new technology remain exclusively reserved for policyholders.

Huge impact on auto insurance

The appearance on the Quebec market of UBAI programs such as Desjardins’ Ajusto or Industrial Alliance’s Mobiliz has had a huge impact on the industry. “A number of analysts believe that 10-30% of auto insurance policies in Canada will be based on and priced according to telematics by 2017. Worldwide, 60% of vehicles will be connected. This market requires a good deal of vigilance and a pro-consumer commitment,” said RCCAQ chairman Jean Bilodeau.

When a telematics device is installed in a vehicle, insurers can track policyholders and gather detailed data on their travel and driving habits.

RCCAQ’s position: in favour, subject to certain conditions

The RCCAQ is clearly in favour of telematics. Based on the data collected, policyholders can receive sound advice from brokers aimed at enhancing their coverage and controlling their usage-based insurance costs; this is one of the positive features. However, the RCCAQ believes that certain basic principles must also be respected. Among other things, telematics must essentially remain a “voluntary option” for consumers, whose support must be based on informed consent. In addition, telematics data must belong to consumers, not to insurers. Insurers must also make UBAI data available so consumers can “export” it if they wish to obtain a quote or enter into a contract with another insurer.

The RCCAQ appreciates the importance of these issues and is aware that urgent action must be taken. In this regard, it continues to lobby the Autorité des marchés financiers (AMF) with a view to establishing a legal framework governing the ownership and use of telematics data. “The AMF has yet to issue guidelines for devices that utilize telematics. These guidelines should be issued as a matter of urgency and should apply to all insurers,” said Jean Bilodeau. “We must protect consumers!”

About the RCCAQ

The Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ) is a professional association that seeks to promote and defend the socioeconomic interests of its member brokers and firms. It represents 4,200 brokers in 615 firms and branch offices around the province.

SOURCE: Regroupement des cabinets de courtage d’assurance du Québec