The Indian government is requiring all public transport vehicles with a seating capacity of over six people to have location tracking devices installed, and insurance companies are seen as best positioned to capitalise on this growth.
The new regulation, which will take effect from 1 April 2018, will apply to state transport buses, school vans, ambulances and other special-purpose public carriers, reported the Times of India.
Mr Sanjay Datta, Chief-Underwriting and Claims at ICICI Lombard General Insurance, said: "Tracking vehicles can lower the chances of theft, hijacks and road accidents."
In addition, with the potential for the Indian telematics market expected to reach US$113.7 million by 2018, insurers see a huge opportunity for themselves. Many insurance companies already have a vehicle distribution network, tie-ups with dealerships and run multiple telematics pilots. Insurers such as Bajaj Allianz, ICICI Lombard and Liberty Videocon, have already live-tested telematics solutions on the road.
Currently, Bajaj Allianz General Insurance has nearly 6,000 vehicles of its policyholders fitted out with telematics devices — which track vehicle location, driving pattern, provide geo-fencing, engine/battery health indicators, towing services and alert emergency services in case of accidents. While currently the related policy sold is for cars, the company can adapt the product for light and heavy commercial vehicles too.
Mr Datta said: "There are two key features when it comes to telematics. One is that it will help us better manage our risk. We'll know, which of our policyholders over-speed, take sharp turns, drink n' drive. For users, the benefit is their premiums could go down if there is data/evidence that they are safe and credible drivers. Over the long term, it could improve road safety and instil better driving behaviour."