Companies Will Now Base Your Insurance Claims on How You Drive #3 Indian Start-ups in Telematics are Helping Insurance Companies Decide Your Premium

A fancy car that is insured from all sorts of damage would be any car lover's dream. And the increasing number of cars on roads has only led to the increased availability of insurance policies.

But a new trend that has already become popular globally and is slowly finding its way into the Indian markets is the mix of telematics and insurance. A hardware device installed in your car can detect how you drive. These behavioural patterns are studied by insurance agencies to review the claims filed by their clients.

How It Works

With the use of telecommunications and informatics, a device installed in your car picks up the pattern of your driving, which further helps insurance companies in usage-based insurance.

CarIQ, a connected car platform, was the first in India to establish a partnership with Bajaj Allianz to give them the data on driving patterns of drivers.

They rolled out the project with the policy holders of Bajaj Allianz, focusing mostly on individual car owners. "We help insurance companies provide usage-based insurance on the basis of how a person drives. The premium is decided accordingly. The first step is to get the right data. The second step is to refine the data for the insurance companies by procuring information from the backend. We then help them define products," said Sagar Apte, founder and CEO of CarIQ that was set up four years ago.

They have partnered with insurance companies in Singapore, Dubai, Indonesia and Sri Lanka.

How Insurance and Connected Car Platforms Match — Swipe Right, Gone Right

Talking about how the match between insurance companies and connected car platforms is a great one, Urmil Shah, Co-founder, Carnot, said, "Most car owners don't end up seeking a claim over the course of the year. We're helping insurance companies extend their relationship with customers and play a more meaningful role. In the longer run, we want to help insurance companies drive customer engagement and loyalty."

Carnot helps insurance companies understand their customers better. "We help insurance companies understand how much their customers drive, where they drive and how they drive. This will help insurance companies understand their customers better and tailor make their insurance products", said Shah.

Indians are Not Okay Giving Up Their Privacy

Using telematics to gage a driver's skills have been popularly used by companies abroad, especially in the US and UK but in India it's yet to see the popularity it deserves.

"The Indian market is different. People here are not comfortable giving up their privacy even for cheaper insurance policies. Also, the cost of running these machines is higher and companies want to transfer the cost to the consumer. As we manufacture in India, we are able to offer a lower rate," said Pranshu Gupta, Founder of Trak N Tell.

The company is currently in talks with a few insurance companies and even car and motorcycle manufacturers to launch their product with them.

On the change in perception, Gupta said, "Abroad, the premium is based on the cost of the car, age of the driver and also number of miles covered by him/her every day. The second part of this equation doesn't apply in India. These technologies might create false alerts here, for example when a car gets into a pothole."

But Shah from Carnot has a remedy, "We've developed technology that is trained to know the difference between a pot hole and an accident.", he said.

Betting Big on This

While CarIQ has been offering this policy for a year, Apte said they still have a long way to go. "The response has been very positive so far and what's interesting is that more than Tier I cities, people from Tier II cities are using the product. The cost of technology is coming down. In fact, manufacturing costs have come down for us by 66 per cent, thanks to the government's "Make in India' initiative. Also, Europe and the US have already clearly shown a ROI for the programme," added Apte.

Meanwhile, Shah talked about how the sector is racing ahead. "We are working with a leading insurance company in India and a global car aggregator to give their users access to our platform. We also help in micro-fleet management through which owners can easily keep a track on where the car is or who is driving it and how," added Shah.