Pokémon GO Brings Fear—and Potential Opportunity—to Auto Insurance Industry

by on Aug 02, 2016

pokemon go and driving

Whether it’s the nostalgia, the new technology or the need to “catch ‘em all,” Pokémon GO has taken the nation by storm. While the augmented reality game’s explosion has been a tremendous business success, the obsession of its user base has led to a number of safety concerns that are impacting the insurance industry in very real ways.

One of the biggest concerns is on the road. Texting and driving is illegal in most states already but, considering how Pokémon GO encourages players to get on the move, consumers are finding ways to cover more ground and find more Pokémon as fast as possible. As a result, the streets are seeing a surge of slow-moving vehicles whose drivers are occupied with their phones. Cab drivers have even tried to take advantage of this by offering their services specifically to Pokémon GO players, and some Craigslist posters are describing themselves as “Pokémon GO Chauffeurs.”

New York PD Twitter post
New York Police Department Twitter Post

This phenomenon is obviously causing problems. Police stations have already implored people not to play and drive simultaneously, with law enforcement around the country using social media to try and spread the cautionary message.

But, just like texting and driving, as long as Pokémon GO is an essential part of their lives, people will play and drive. And as long as people are playing, the injuries will keep piling up.

The increased liability caused by Pokémon-and-driving resembles that of texting and driving. When texting and driving was initially becoming a major problem, insurers wanted to see more action by states implementing laws with harsh punishments to try and prevent the behavior. Since the release of the game, AAA has urged drivers to avoid driving and playing. And, while some states currently have laws against distracted driving and reckless driving, the lack of specific laws against Pokémon GO could prove to be a critical oversight.

But while Pokémon GO brings concerns about increasing accidents, it isn’t all bad; by collecting players’ location data, the game raises some exciting opportunities with respect to telematics. As Harry Huberty from Insurance Networking notes:

Despite some discomfort, it’s clear many are willing to trade information about their habits for the fun of playing the game. As many insurers wonder how they might encourage policyholders to turn over automotive telematics data in exchange for rate adjustment, Pokémon GO shows that if the reward is attractive enough, people will bite.

The challenge now lies with insurance industries to create a product where the reward for data sharing is great enough to the consumer, while still making a profit. Insurers could look into utilizing augmented reality tech—as Corporate Insight’s Corey Limmer discussed in a recent blog post—and if they can convince individuals to overlook concerns about sharing their location and driving habits through telematics, it could benefit clients and firms alike. Safeco and Liberty Mutual are ahead of the game with their RightTrack program, which gives customers a 5% discount just for enrolling, with the opportunity to get up to 30% off based on their driving ability.

As long as Pokémon GO continues to be among the most played games in the country, insurers will need to adjust to the increased risk and decide whether a single mobile app will force them to increase premiums. At the same time, smart firms will capitalize on the opportunities the game presents with respect to data sharing and telematics.