India: "Pay As You Drive" insurance yet to catch on
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March 2016The implementation of "Pay As You Drive" insurance is still at the pilot stage in India even though the country's IT giants like Infosys, Tech Mahindra and Harman India are providing an IT backbone for global insurers in delivering telematics solutions.
Most general insurers such as ICICI Lombard General Insurance and Liberty Videocon General Insurance already have a pilot telematics project, reported the Times of India.
However, cost appears to be a big factor retarding the development of telematics.
"India has the technical expertise (in telematics), but not the regulations to back it up. Automakers are wary of bringing out more expensive cars on the road by fitting them with a telematics black box amidst cut-throat competition,” said Vinaya Kumar Nerella, Vice President of Toyota Tsusho Insurance Broker India.
Mr Vijay Kumar, CTO, Motor Insurance, Bajaj Allianz General Insurance, said: “Another drawback to fitting it in cars is that a four-wheeler motor insurance policy is about INR3,000 (US$45) to INR4,000 on average, and the cost of a black box is also roughly the same. So it doesn't make sense in the Indian market, where premium rates are already competitive and loss ratios are at an all-time high. Smartphone-based telematics solutions would be more viable."
Source: asiainsurancereview.com
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