Allstate Corp. Chief Executive Officer Tom Wilson created a
stand-alone unit for a telematics business that he expects to grow rapidly by
collecting data on drivers and selling analytics products to third parties.
The firm is named Arity and will also serve the insurer’s own brands
including Esurance, Wilson said Wednesday in a phone interview. Allstate, the
largest publicly traded U.S. provider of home and auto coverage, has been using
telematics for at least six years to help clients drive safely and obtain
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Arity can “incorporate new data sources and enhance analytical capabilities
in ways that we weren’t able to do when it was embedded in the insurance
company,” Wilson said. “It’s a big enough platform today with the Allstate
customers in it, and that will continue to grow, but we’d like it to grow even
faster with a broader set of customers.”
To read more about Allstate’s data push, click here.
Allstate rival Progressive Corp. has used technology for years to track
driver habits and offer discounts to its safest clients. The approach has gained
appeal in other sectors. Verizon Communications Inc. agreed this week to spend
$2.4 billion to buy a GPS vehicle-tracking company.
Wilson has been seeking to offset pressured margins at the car-insurance
business. The Northbrook, Illinois-based company announced Wednesday that
second-quarter net income slipped to $271 million, or 64 cents a share, from
$355 million, or 79 cents, a year earlier. Wilson said the telematics business
has tripled over the past three years.
“We’ve reached a million late last year in terms of active connections, and
we expect it to grow quite aggressively,” he said. “It’s a good growth business
which is one of the reasons we wanted to make sure it wasn’t restricted by the
efforts of being inside an insurance company.”