Hartford to Pilot a Telematics-Based Auto Policy Next Year

Hartford Financial Services Group will roll out a telematics-based automobile insurance policy in the first half of 2012, Andy Napoli, president of Hartford's consumer markets, said during an investors meeting on Dec. 8.

The company is investing in telematics, "the use of devices in insured vehicles to transmit information about driving behavior, such as miles driven, speed, acceleration, deceleration, and using that information to price the risk," Napoli said.

Hartford's telematics program, called "TrueLane," will be piloted in the first half of 2012, Napoli said.

"The data is compelling," he said. "We feel strongly that carriers that do not adopt telematics will subject themselves to adverse selection, as this capability has really redefined the way we think about pricing auto."

Insurers having a 60% market share in the personal auto market have implemented some version of usage-based insurance in at least one state, according to Towers Watson research, and even more are running or preparing pilot programs. Usage-based insurance, also called UBI, programs have been implemented in all states, except Hawaii, and 18 states, including California, Texas, Illinois and Ohio, have at least four personal auto UBI programs, according to Towers Watson (Best's News Service, Oct. 11, 2011).

Among personal auto insurers, Progressive's Snapshot program, now available in 40 states, including Texas, New York, and Florida, has the largest geographical presence. Progressive says with Snapshot, a telematics device manufactured by Xirgo Technologies Inc., good drivers can save up to 30% on their car insurance. GMAC Insurance's mileage discount program, offered to OnStar subscribers in 35 states, promises savings of up to 54% a year for people who drive less than 15,000 miles annually (Best's News Service, Oct. 11, 2011).

Allstate Corp.'s DriveWise device is available only to drivers in Illinois, Ohio and Arizona. Allstate says "safe" drivers can save up to 30% with DriveWise (Best's News Service, Oct. 11, 2011).

Hartford is the 11th-largest writer of all private passenger auto by direct premiums written, according to BestLink.

Hartford Insurance Pool currently has a Best's Financial Strength Rating of A (Excellent). Shares of Hartford Insurance Group were trading the afternoon of Dec. 9 at $17.53, up 1.92% from the previous close.

(By Meg Green, senior associate editor, BestWeek: [email protected])