Toyota and Aioi Nissay Dowa Insurance have established a joint venture telematics car insurance services company. The automaker’s new Plano-based in-car technology company will take the lead in developing products that analyze drivers’ behaviors and patterns and set their auto insurance rates accordingly.
The new insurance company will be called Toyota Insurance Management Solutions USA LLC, or TIMS. TIMS is a joint venture of Toyota Motor Corp., Toyota Financial Services Corp., and Aioi Nissay Dowa Insurance Co. Ltd.
Twin six-story buildings, East 1 and West 1, face Headquarters Drive and serve as the main buildings with five more being built behind them on Toyota North America's 100-acre corporate campus in West Plano.
Toyota and Aioi Nissay Dowa, both based in Japan, announced the joint venture on Wednesday, and said that their respective U.S. subsidiaries established the telematics car insurance services company on April 1.
Telematics refers to the blending of information technology and wireless telecommunications for long-distance transmission of computerized information. Telematics has many applications, but in this case a primary one will be to monitor Toyota customers’ driving patterns and develop pay-by-the-week auto insurance with rates based on the individual drivers’ behind-the-wheel behavior instead of broad statistical information, said Zack Hicks, CEO of Toyota Connected and chief information officer at Toyota Motor North America.
Toyota Connected, a new company the automaker launched this month, will investigate and develop the telematics for the new insurance offering, Hicks told me in an interview in his office. Here’s a snippet from our interview.
How will Toyota Insurance Management Solutions work? This will allow people to start buying insurance by the week. If you drive aggressively that week, your rate will go up the following week. If you drive conservatively, your rate will go down. It’s essentially use-based insurance, but instead of the insurance company owning the data, the customer owns the data, and the customer has the switching power to shop their driving patterns to the lowest (insurance provider).
What is Toyota Connected’s role? We’re a 5 percent owner in the company (TIMS). It’s mostly owned by our finance company and Aioi Nissay Dowa. We’ll be partnering with them as we’re aggregating data. If a customer wants to do this type of service, they would notify us, and we would start tracking their driving patterns, then give the driving score to these insurance companies to allow them to buy insurance in new ways.
That’s really cool. Particularly for young people. It’s a new way of buying insurance, especially if you’ve got a lot of risk. You may be 18 years old or 20 years old, but you’re really a good driver. You shouldn’t have to pay based on how other 18-year-olds drive.
How does this change the car insurance game? Essentially it’s creating this new use-based insurance. We’ve already seen before some insurance companies offering (a device) that if you plug it into your car, they’ll track you. But this takes it to the next level by putting the customer in charge of who they want to share that data with. If Toyota becomes a trusted scorer of drivers, we know that insurance companies really want this type of service.
Are there applications beyond insurance? If you take it to the next level, when it comes to car-sharing, you may be comfortable sharing your car with somebody you know, or someone you know has a really good driving score, but not giving it up to a total stranger. So there is applicability for scoring drivers beyond the insurance model.
How much will Toyota spend on research and development for Toyota Connected? That’s to be determined. We were just founded and it was just launched last week.
