Usage-based insurance plans in motor insurance

     

The evolution of auto insurance in India is driven by a growing focus on the needs of customers. Usage-based insurance plans, such as PAYD (pay-as-you-drive), PHYD (pay-howyou-drive), and combination of PAYD and PHYD, offer customers the flexibility and convenience they desire, allowing them to pay only for the coverage they use. With the rise of ride-sharing services and other transportation alternatives, many people are driving less than they used to. Traditional insurance plans may not meet the needs of these customers, as they are locked into a set coverage plan regardless of their usage. Usage-based insurance plans, on the other hand, provide customers with the flexibility to choose a coverage plan that best suit their needs. Another reason why customers prefer usage-based insurance plans is that it enables them to become safer drivers. By providing real-time feedback on their driving behaviour, customers can make adjustments and improve their driving skills. This not only leads to safer roads, but also helps customers save money on their insurance premiums. While usage-based insurance plans are designed to benefit customers, they also provide benefits for insurers. Telematics technology, which is used to track and monitor a vehicle's usage and behaviour, provides insurers with the data they need to offer personalized pricing and improve underwriting decisions. This allows insurers to offer more competitive rates to safer drivers and charge higher rates to those who pose a higher risk. Overall, the evolution of auto insurance in India is moving towards usage-based insurance plans that offer customers the flexibility and convenience they desire. Telematics technology is a key enabler of this trend, as it provides insurers with the data, they need to offer personalized pricing and helps customers to become safer drivers.

Manish Nachnani is the Head of Customer Experience at Edelweiss General Insurance, where he specializes in digital transformation of operations, customer service, and claims