General Motors is returning to the US auto insurance market using data from on board telematics.

The automaker said OnStar Insurance is a "new digital insurance experience that aims to be secure, fair, personalised and easy to use".

The system will reward good driving with lower rates.

The company said it was working insurance carrier partners to offer insurance that "takes biased judgement out of insurance shopping by focusing on factors within the customer's control: individual vehicle usage and rewarding smart driving habits that benefit road safety".

The smart driver feature will provide proactive recommendations for smarter driving habits so customers can drive more safely and potentially earn discounts.

Andrew Rose, president of OnStar Insurance Services, said: "We aim to be an industry leader, offering insurance in an innovative way. GM customers who have subscribed to OnStar and connected services will be eligible to receive discounts, while also receiving fully integrated services."

Policyholders who have an OnStar Safety & Security plan will have Automatic Crash Response which can notify an advisor who can send for help.

Starting with Arizona residents, OnStar Insurance Services will initially offer insurance to GM employees in Q4 2020, expanding to additional customers, including the general public, in early 2021.

GM used to offer insurance through its GMAC unit but that was sold off during the 2009 bankruptcy process.

The Wall Street Journal said GM was working with a subsidiary of American Family Insurance to underwrite the policies.

Some automakers provide driving data to insurance companies to help connect their owners to better insurance rates, though few have gone a step further to offer their own plans, the WSJ said. Tesla uses data from its cars to offer insurance to customers while Ford last month said it would give vehicle owners access to cheaper insurance by beaming data from the car to a data exchange used by many carriers to crunch rates, the report added.

The WSJ said the number of auto insurance policies in North America that use digitally logged data from the car is expected to grow to nearly 50m in 2023, from about 10.6m at the end of 2018.