India

Consumer Digital Behaviour could Decide Premium for their Cars in Future


Do you know? People who renew their car insurance at least 4 days prior to expiry are less likely to file a claim for damages over those who do it at a later stage. Similarly, consumers driving petrol cars are less likely to claim insurance in comparison to those who are using diesel or CNG vehicles. These are some of the interesting findings of the first-ever industry report on the behaviour of digital car insurance customers in India, compiled by Policybazaar.com’s “Product & Innovation Centre”.


 



Key takeaways of the report:


  • People who renew their car insurance at least 4 days prior to expiry are less likely to file a claim for damages over those who do it at a later stage.


  • People who buy on their own exhibit lesser claims.


  • Karnataka, AP and Maharashtra are the top-3 in terms of performance.


  • Interestingly, Delhi is among the top-5 performers, when conventionally they are not seen in the same light in the offline market.


  • Maruti, Hyundai and Mahindra are among the top performers on claims outcome.


  • Skoda & Volkswagen show a higher frequency to claim and cost more per claim.


  • If a car owner has claimed in the previous year, he is more likely to claim again in the current year.


  • Diesel/CNG car buyers are usually driving more and consequently are more likely to have a claim because they spend more time on the road.


  • SUV customers tend to show comparatively better claims behaviour then conventionally known.


  • Smaller hatchback customers have less propensities to claim.


The report titled, “Driving the Digital Way: The World of Car Insurance Buyers” has been compiled after analysing the behaviour of almost 3 lakh digital consumers, and focuses onstarting an informed discussion on how car insurance premium can be priced in India.


 


The report analyses the loss behaviour of digital car insurance customers across multitude of parameters – geography, car brand, Amount of NCB (no claim bonus) carried by the customer, fuel type, car type and vehicle age. But more importantly, the report also attaches the correlation of digital behaviour parameters of customer to such loss ratios – the number of days prior to expiry that the customer renews his insurance as well as whether he needed assistance to buy the policy.


 


Speaking on this, Tarun Mathur, Director, Policybazaar.com, said, “In India, car insurance policies are priced according to the vehicles and geography but not on drivers, resulting into unanimous pricing for both good and bad drivers. After studying the behaviour of almost 3 lakh Policybazaar.com customers who have bought car insurance from us, we have been able to analyse their claims pattern and likelihood to claim in future. The report further highlights the strong correlation of claims and digital buying behaviour of the customer.


 


He further added, “As a company, we play a strategic role for all our partners in designing and bringing value creating products for the customers. The key inferences of the report will help all our partners to build profitable and sustainable businesses by segmenting profiles of customers according to their buying behaviours.”


 


Commenting on this, Vaidyanathan Ramani, Head- Product and Innovation Center, Policybazaar.com, said, “Across developed markets, car insurance customer gets a price quotes based on a number of personal characteristics besides the description of the car.In India, the current pricing model is a result of channel and cost considerations. We believe that this report and our associated work can help move the market towards delivering personalized pricing


 


According to the findings of the report, the online car insurance industry (only the own damage component) is roughly operating at a loss ratio of 76%. In the long term, the report envisions to aid motor insurance companies to understand and assimilate the characteristics of individual customers in India, which shall improve product offerings and enable the insurers to adopt new business strategies and tactics.  


 


To download the report, please visit:


https://www.policybazaar.com/pdfs/driving-the-digital-way-report-from-policybazaar.pdf.


 


About PolicyBazaar.com:


PolicyBazaar.com is India’s largest insurance marketplace. It has backing from a host of investors including the likes of Temasek, Tiger Global Management, True North, InfoEdge (Naukri.com), Premji Invest, besides investments from other PE funds and family offices. The portal started with a purpose to educate people on insurance products and has had a significant influence on how insurance is bought in India. It has helped in driving penetration of pure life insurance, health insurance and such products which were barely bought earlier.


 


From receiving traffic of 180,000 visitors in 2008, PolicyBazaar.com has come a long way and today hosts over 100 million visitors yearly and records sale of nearly 200,000 transactions a month. Currently, PolicyBazaar.com accounts for nearly 25% of India’s life cover, and over 7% of India’s retail health business. It accounts for roughly half of all internet based insurance purchase in the country, and is more than doubling annually.


 


The company has received several accolades in India and globally. The most noteworthy being recognized as India’s top and world’s leading “Fin Tech Innovator” by the Global consultancy firm, KPMG and venture capital fund, H2 Ventures for 2015 & 2016. It has won a range of awards, including The Financial Express “Best Fintech Marketplace”, The Economic Times “Best Corporate Brand”, Internet & Mobile Association of India (IAMAI) “Best Financial Website” for two years, and BML Munjal Award for “Excellence in Learning & Development” among the most notable ones in the last couple of years.


Source: NV1

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