Driven by digital innovations: Regulating connected car data access and use, for Telematics Insurance in Europe.

Abstract

The topic of this research is whether the European Union (EU) legal and regulatory framework is fit for purpose in relation to the take-up of telematics insurance. As an example of use-based insurance, telematics insurance is made possible by continuing advancements in data analytics and sensor technologies as well as the shift in the automotive industry towards the development of a business ecosystem around the connected car and value proposition that user-generated car data brings. With a focus on balancing the different interests of the stakeholders involved for competition, privacy, and innovation; the position taken in the thesis is that there is an urgent need for regulatory action to respond to the legal challenges but not that there needs to be a complete redesign of the regulatory framework. The analysis of the key EU regulations – namely, the Insurance Distribution Directive; The Database and Trade Secrets Directive; the Treaty on the Functioning of the European Union; and the General Data Protection Regulation – indicates that, although the current legal framework has the elements in place to help facilitate telematics innovations based on connected car data, several improvements are urgently needed. First, there needs to be more clarity about the scope of the relevant rights and responsibilities for the principal stakeholders (consumers, insurers, and car manufacturers) especially with respect to the data and information sharing duties they have towards each other. Second, the overall coherence of the regulatory environment needs attention by clarifying for stakeholders how to comply in the case of conflicting requirements that stem from the different regulations that apply. Third, responding to concerns about market domination, the regulation of competition and enforcement thereof must be improved to address the potentially disruptive effects of the shift towards business ecosystems and non-traditional market players. Finally, due to the limited scope of this research and the ongoing developments taking place, the thesis calls for further research to gain more insight into how to regulate in a way that facilitates innovation while ensuring this is beneficial in terms of consumer welfare.