The impact of COVID-19 has been felt in many lines of Insurance globally, with Auto being one of the most evident. With the COVID induced lockdowns and work from home continuing for months altogether, there has been a drastic reduction in usage of cars. In several markets, Insurers have offered refunds or discounts to customers, resulting in reduced premiums. Though with reduced number of accidents and claims, the overall results for the Auto Insurers seem to be mildly positive in the short term. Going forward, some expect a decline in the auto premiums as exposure reduces and car owners become keen to do price shopping or opt for bare minimum plans.
Pandemic has also resulted in a shift from shared mobility or public transport to personal transport that is resulting in a bump up (possibly temporary) for both new and used car purchases in several markets. How this plays out in terms in the coming months in terms of overall premiums depending upon the mix of vehicles remains to be seen.
Increased adoption of Usage Based Insurance
Another key impact of COVID-19 has been acceleration of Telematics (Connected Car) insurance or Usage Based Insurance (UBI). As people are driving less, there is a natural tendency to pay for Insurance based on car usage and early adopters of UBI among the Insurance companies have an advantage here. As per Ptolemus, global market for UBI policies expanded by 12% to 28.4 million active policies in 2019 and it would be interesting to see how this number has grown over 2020.
Our view is that UBI is part of an overall positive trend for connected car services and it gets a further adoption push due to COVID-19. We also expect increased demand for short term Car leasing or Car-as-a-Subscription model, all enabled by connected car technologies.
Beyond Usage based Insurance, Auto-Insurers are leveraging Connected Car solutions to drive more frequent and positive digital engagement with the car owners, for example by offering rewards for safer driving or enabling relevant eco-system transactions such as car servicing.
Overall business goals of Auto-Insurer from the Telematics Insurance program will determine the investments and technologies used. As a Telematics Solution provider, we at AutoWiz offer telematics technology options at various price points that meet Insurer's data gathering, customer privacy and cost objectives.
AutoBeacon SmartPhone Telematics
We now offer our AutoBeacon Solution which is tailormade for Smartphone Insurance Telematics. It is an advanced Driving Behavior Monitoring App that measures driving behavior using Sensor data and rates each trip on various safe driving parameters, besides recording vehicle usage data. AutoBeacon in Phone Mode collects data from Driver's smartphone while driving and does not require any device in the vehicle. AutoBeacon in Beacon mode uses a low cost BLE Beacon device placed in the vehicle in combination with Driver's Smartphone to accurately measure Driving behavior.
If you an Insurer looking to kickstart your Telematics Insurance program within a few weeks, reach us.
