General Motors is re-entering the insurance market, a sector it left over ten years ago, but is now approaching with a focus on modern, connected vehicle technology.

This new offering, known as OnStar Insurance, will provide combined auto, home, and renters’ insurance policies. Initial availability will be limited to GM employees in Arizona starting this year. GM’s dedicated insurance agency, OnStar Insurance Services, will serve as the sole agent for OnStar Insurance. The insurance program will be underwritten by Homesite Insurance Group, which is associated with American Family Insurance.

The service will become accessible to the general public across the country by the close of 2022, and will extend to owners of vehicles from brands other than GM’s Buick, Cadillac, Chevrolet, and GMC. A key objective is to utilize the extensive data gathered through its OnStar connected car service, which currently has over 16 million subscribers in the United States.

GM believes this data will benefit drivers by potentially leading to reduced insurance premiums based on demonstrated safe driving behaviors.

“We are aiming to provide our customers with increased clarity and more influence over their insurance costs and the overall expense of vehicle ownership,” explained Russell Page, GM’s head of business intelligence, in a recent discussion.

The volume of data involved is significant. The company has recorded more than 121 million GB of data usage across its Buick, Cadillac, Chevrolet, and GMC vehicles since the introduction of 4G LTE connectivity in 2014.

The growing number of internet-enabled vehicles has generated substantial data streams. GM has been a prominent leader in data collection, owing to its well-established OnStar platform, which was first launched in 1996. However, GM is not the first, nor will it be the last, automotive manufacturer to explore ways to utilize this data for services like insurance. Tesla, for example, introduced an insurance service in 2019 that aimed to provide rates 20% or even 30% lower than those of competing insurers. Earlier this year, TechCrunch reported that Rivian was seeking an insurance agency data manager, indicating plans to offer insurance to its customers.

GM will encounter competition from various smartphone applications and plug-in devices that connect to a vehicle’s OBD-II port to monitor performance and driver behavior, often offering insurance discounts.

GM previously operated in the insurance industry, beginning in 1925, but divested its insurance division in 2008. GM asserts that its telematics data, combined with its in-depth knowledge of vehicle characteristics and features, will enable it to offer substantial savings to drivers.

“We will then apply what we learn as we progress to develop innovative products in the coming years,” Page stated. “Consider it a process of continuous improvement and development.”