Advanced Info Service (AIS) and Thaivivat Insurance are working together to apply narrowband Internet of Things (NB-IoT) technology to car insurance service.
NB-IoT is the standard connection used by the low-power wide area network under the 3G Partnership Project and is designed for IoT equipment and solutions.
"AIS is collaborating with Thaivivat to use this advanced technology to serve customers and create a different business model from other insurance rivals," said Yongsit Rojsrikul, chief of enterprise business for AIS.
AIS invested in a NB-IoT network countrywide and the technology works indoors and underground with the use of low mobile data traffic, he said.
NB-IoT can be used for on-off auto insurance service.
When auto engines start, IoT devices would send signals to the insurance firm to begin insurance coverage automatically. When the engines stop, the devices would deliver signals to the firm to automatically stop insurance coverage.
Accordingly, insurance coverage and premium insurance payment by customers would be based on the actual use of their vehicles.
Users need to plug a SIM-card-embedded tracking device into their vehicles. The device is easy to install and can be linked with a mobile app, with which customers can see their auto usage.
Jirapan Assawathanakul, president and chief executive of Thaivivat, said the company has invested 100 million baht in the technology to differentiate services from other insurance providers and cater to new lifestyles, particularly among youngsters.
On-demand auto insurance or user-based insurance is designed for motorists who drive less than four hours a day and make routine drives.
"We found that an average user spends two hours driving between home and work every day," Mr Jirapan said. "This on-demand insurance will help them save premiums up to 40%."
The country's non-life insurance market is worth 280 billion baht, of which 200 billion baht comes from car insurance.
Some 30% of motorists are apparently unwilling to apply for auto insurance because they might be unable to afford insurance premiums. The majority of the drivers apply for compulsory third-party insurance.
"On-demand insurance will enable the company to tap into new-generation users and drivers who cannot afford to pay yearly auto insurance premiums," Mr Jirapan said.
The company also plans to offer more on-demand insurance services, such as travel and health insurance, through wearable devices.
Mr Jirapan said on-demand insurance is expected to gain ground in Thailand within a couple of years.
Mr Yongsit said NB-IoT technology should help push down costs in the insurance sector by at least three or four times compared with on-board diagnostics, the technology now in use.
User-based insurance service could be offered in other industries, such as logistics, delivery, transport and finance leasing.
Mr Yongsit said the enterprise sector is geared towards digital transformation and AIS expects 15% of revenue or 15 billion baht to come from enterprise this year.