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Can privacy concerns for insurance of connected cars be compensated?

Author

Listed:
  • Sebastian Derikx

    (Delft University of Technology)

  • Mark de Reuver

    (Delft University of Technology)

  • Maarten Kroesen

    (Delft University of Technology)

Abstract

Internet-of-things technologies enable service providers such as insurance companies to collect vast amounts of privacy-sensitive data on car drivers. This paper studies whether and how privacy concerns of car owners can be compensated by offering monetary benefits. We study the case of usage based car insurance services for which the insurance fee is adapted to measured mileage and driving behaviour. A conjoint experiment shows that consumers prefer their current insurance products to usage based car insurance. However, when offered a minor financial compensation, they are willing to give up their privacy to car insurers. Consumers find privacy of behaviour and action more valuable than privacy of location and space. The study is a first to compare different forms of privacy in the acceptance of connected car services. Hereby, we contribute to more fine-grained understanding of privacy concerns in the acceptance of digital services, which will become more important in the upcoming Internet-of-things era.

Suggested Citation

  • Sebastian Derikx & Mark de Reuver & Maarten Kroesen, 2016. "Can privacy concerns for insurance of connected cars be compensated?," Electronic Markets, Springer;IIM University of St. Gallen, vol. 26(1), pages 73-81, February.
    • Handle: RePEc:spr:elmark:v:26:y:2016:i:1:d:10.1007_s12525-015-0211-0
    DOI: 10.1007/s12525-015-0211-0
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    References listed on IDEAS

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    2. Baumann, Martina F. & Brändle, Claudia & Coenen, Christopher & Zimmer-Merkle, Silke, 2019. "Taking responsibility: A responsible research and innovation (RRI) perspective on insurance issues of semi-autonomous driving," Transportation Research Part A: Policy and Practice, Elsevier, vol. 124(C), pages 557-572.
    3. Cloos, Janis & Mohr, Svenja, 2022. "Acceptance of data sharing in smartphone apps from key industries of the digital transformation: A representative population survey for Germany," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
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    6. Christian Eckert & Christof Neunsinger & Katrin Osterrieder, 2022. "Managing customer satisfaction: digital applications for insurance companies," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(3), pages 569-602, July.
    7. Adam Śliwiński & Łukasz Kuryłowicz, 2021. "Usage‐based insurance and its acceptance: An empirical approach," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 24(1), pages 71-91, March.
    8. Ashu Tiwari & Archana Patro & Imlak Shaikh, 2019. "Information Communication Technology-Enabled Platforms and P&C Insurance Consumption: Evidence from Emerging & Developing Economies," Review of Economics & Finance, Better Advances Press, Canada, vol. 15, pages 81-95, February.
    9. Adam Sliwinski & Lukasz Kurylowicz, 2021. "The Value of Privacy - Empirical Research, Using Drivers as an Example," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 936-953.
    10. Rainer Alt & Carsta Militzer-Horstmann & Hans-Dieter Zimmermann, 2016. "Electronic Markets on self-archiving," Electronic Markets, Springer;IIM University of St. Gallen, vol. 26(1), pages 1-5, February.
    11. Wei Liu & Zongshui Wang & Hong Zhao, 2020. "Comparative study of customer relationship management research from East Asia, North America and Europe: A bibliometric overview," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(4), pages 735-757, December.
    12. Frank Ebbers & Jan Zibuschka & Christian Zimmermann & Oliver Hinz, 2021. "User preferences for privacy features in digital assistants," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(2), pages 411-426, June.
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    14. Key Pousttchi & Alexander Gleiss, 2019. "Surrounded by middlemen - how multi-sided platforms change the insurance industry," Electronic Markets, Springer;IIM University of St. Gallen, vol. 29(4), pages 609-629, December.

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    More about this item

    Keywords

    Privacy; Mobile services; Insurance; Internet-of-things; Connected cars; E-mobility;
    All these keywords.

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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