  The use of behavioural data in insurance is loaded with promises and
unresolved issues. This paper explores the related opportunities and challenges
analysing the use of telematics data in third-party liability motor insurance.
Behavioural data are used not only to refine the risk profile of policyholders,
but also to implement innovative coaching strategies, feeding back to the
drivers the aggregated information obtained from the data. The purpose is to
encourage an improvement in their driving style. Our research explores the
effectiveness of coaching on the basis of an empirical investigation of the
dataset of a company selling telematics motor insurance policies. The results
of our quantitative analysis show that this effectiveness crucially depends on
the propensity of policyholders to engage with the telematics app. We observe
engagement as an additional kind of behaviour, producing second-order
behavioural data that can also be recorded and strategically used by insurance
companies. The conclusions discuss potential advantages and risks connected
with this extended interpretation of behavioural data.

Computers and Society