Chennai:
Insurance
companies in India are adopting a new technology called telematics, a box
like device to be be fixed in the car, to monitor the behavior of the driver.
Many
insurance firms including Liberty Videocon General Insurance Company are now
relying on the technology to assess the risk of the driver having an accident
and charge premiums accordingly.
Roopam
Asthana, chief executive officer and director of Liberty Videocon said on
Friday that his company is one of the first to try out this technology in
India.
“Currently,
we are trying out this technology in Mumbai and Ahmedabad on 1,000 cars. These
are tried out across various brands and models. Based on the outcome we will
decide whether to expand it to other areas,” he said.
The
cars will be fixed with the telematics after the insurance firms tying up with
the dealers, manufacturers and the technology provider, Asthana said.
The
basic idea of telematic auto insurance is that a driver's behavior is monitored
directly while the person drives and this information is transmitted to an
insurance company, said Asthana.
The
insurance company then assesses the risk of that driver having an accident and
charges insurance premiums accordingly. A driver who drives less responsibly,
will be charged a higher premium than a driver who drives smoothly and with
less calculated risk of claim propensity.
Interestingly,
this technology could revolutionise the motor insurance sector in India, which
is worth Rs 30,000 crore. Earlier,
underwriters use crude demographic data such as
age, location and sex to assess the risk of the driver having an accident. Now
by monitoring their customers’ motoring habits, underwriters can increasingly
distinguish between drivers who are safe on the road from those who merely seem
safe on paper, said Asthana.
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