GM’s announcement follows the lead of Tesla which also announced the launch of its own auto insurance earlier this year
The hypercompetitive private passenger auto insurance marketplace is looking to get even more competitive in 2021. General Motors has announced that beginning later this year it will begin to offer all of its auto customers the ability to purchase auto insurance through them. The automaker says that it will begin offering OnStar Insurance through its 20-year-old OnStar Brand. The company says the exclusive agent for its new auto insurance product will be GM’s new insurance agency, OnStar Insurance Services.
“OnStar Insurance will promote safety, security, and peace of mind,” said Andrew Rose, president of OnStar Insurance Services. “We aim to be an industry leader, offering insurance in an innovative way. GM customers who have subscribed to OnStar and connected services will be eligible to receive discounts, while also receiving fully-integrated services from OnStar Insurance Services.”
Highlighting the fact that a vehicle purchase is one of the most significant purchases a person makes, the company says that through its new OnStar Insurance Services it will be able to “…leverage its unique understanding of the vehicles GM produces to offer a secure, fair, personalized and easy-to-use digital insurance experience for drivers.”
Launching in Q4-2020
The automaker is expecting to launch its OnStar Insurance Service starting in Arizona later this year. Initially, insurance will only be offered to GM employees in Q4-2020 before expanding to the general public in 2021. Eventually, the company plans to offer a “centralized location for customer’s automotive insurance needs” and will be working on creating a seamless insurance customer shopping service.
This latest announcement similar to Tesla’s announcement earlier this year seems to indicate the growing integration of the white label insurance option in the auto buying process. The following is a video produced by General Motors introducing OnStar Insurance
GM is no newcomer to the insurance business
The new OnStar insurance venture is not the first time that General Motors augmented its car sales by bundling auto insurance into the transaction. Starting in 1925, General Motors operated Motors Insurance selling first-party property damage coverage to car buyers. Later it added GMAC Insurance, and, In 1997, it acquired Integon Insurance, a nonstandard automobile insurer, which it renamed GMAC Personal Lines.
In 2006, the company sold fifty-one percent of its financial services unit including its insurance businesses to a hedge fund. In 2010, it sold the balance of its interest. See Agency Checklists’ article of February 9, 2014, “With Its Purchase of Tower Group, Can GMAC Insurance Become A Market Factor In Massachusetts?” The purchaser of GMAC Insurance marketed its insurance products using the “GMAC Insurance” brand name and logo until 2013 when it retired the name and marketed under the National General name.