News Technology26 Jun 2018

India:Telematics-based insurers face road blocks

26 Jun 2018

Start-up and traditional insurers are trying to cut motor losses by collecting granular data from customers, such as driving behaviour, distance driven and time taken for each trip, among others. Insurers say that they can frame pricing policies using granular data to cater to the customer's needs, while charging premiums on how the vehicle is being driven.

But insurance regulations on pricing, the high cost of telematic devices, and a lack of well-defined data protection rules, are hindering development of digitised insurance products, reports Live Mint citing legal and insurance experts.

For instance, the variable premium pricing, widely known as “pay-as-you-go”, cannot be implemented in India since IRDAI regulations only allows fixed premium pricing. With such a regulation, insurers in India who use telematics only offer discounts on the final premium, instead of varying prices on the basis of vehicle usage.

Last year, the IRDAI issued a white paper on the potential of telematics in insurance pricing. The regulator has yet to issue final guidelines.


 

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