LatAm advances along the connected car highway

Connected car insurance is growing in Latin America. Solutions are available in the likes of Chile and Mexico.

Insurtech is in its early stages of development in Latin America and telematics is among the segments leading the charge.

The latest to enter the arena is Argentine insurer Sancor Seguros, which has launched a pay-how-you-drive solution branded Auto Inteligente.

The firm has developed an associated app and offers "safe drivers" access to benefits. Auto Inteligente is being trialed in Santa Fe province and will later be rolled out to other parts of the country, the company said in a statement.

Meanwhile, regional connected car insurance pioneer Jooycar – which powers Colombian giant Sura's pay-per-km and pay-how-you-drive solutions in Chile – is looking to expand its footprint and has the whole region on its radar.

María Paz Gillet, CEO of Santiago-headquartered Jooycar, told BNamericas that insurers in countries including Mexico, Honduras, Guatemala, Argentina, Colombia and Brazil are testing its products.

In Chile, Jooycar and Sura introduced the pay-how-you-drive solution in 2016 and the pay-per-km product – the first in Latin America – the following year.

In terms of digital transformation and innovation, the insurance industry is a few steps behind banking – but insurers are catching up.

ALSO READ: Mexico's Atlas introduces pay-per-km auto coverage

Gillet (pictured) said that winds of change are whipping through the industry, and forecast that, by 2020, about 5% of car insurance policies in the region will be "connected."

Citing reasons for forecast growth, Gillet said: "Latin American people love to be social and connected, especially millennials. When insurers change their value proposition by introducing connected car insurance, they become more of a service-generator and appeal to consumers whose buying preferences are for more connected and personalized products."

Gillet envisages a shift from the current model of static, fixed policies to one where a client initially buys a basic policy and can then "bolt on" additional services and adapt the policy as their coverage requirements change.

But the whole idea of connected insurance should not be limited to usage-based insurance (UBI), she added.

Gillet said: "For us, connected insurance is more than UBI. For example, connected insurance could refer to the idea of purchasing insurance in your car [via a factory-installed app through which you activate a policy]. We're working on some things related to this.

"We think that in the future, this will be the natural channel for buying insurance, the standard. And if you don't share your driving data, your policies will be more expensive."