Digital transformation is shaping the way insurance companies do business and changing consumer behaviour in buying insurance products, enabling insurers to compile information about driving habits to calculate risks and offer usage-based policies, which helps some car owners pay lower premiums if they can prove to be safe drivers or they drive less.
The technology offers consumers more convenience and saves time in filing insurance claims, which can be done anywhere, anytime via mobile apps.
TELEMATICS AND PAY-PER-USE MODELS
Personalised insurance premiums based on individual driving behaviour and number of miles driven are setting the trend, but reduced privacy is the price to pay to qualify for lower premiums.
Telematics devices installed in vehicles monitor a number of factors, including speed, cornering, acceleration, breaking, location and time of journey, allowing insurers to use this information to assess driving risks and determine premiums.
Drivers who adopt safer practices and have lower mileage are rewarded with higher discounts when they renew policies, while reckless drivers are subject to more expensive premiums. Driving fewer miles also carries a lower risk of car accidents, hence such drivers are subject to a lower premium.
Bangkok Insurance (BKI) has offered telematics technology to their motor insurance policyholders over the past several years.
The technology offers a safety driving score for three durations -- seven days, 30 days and 12 months -- and alerts when vehicles are driven out of specified areas. The devices track real-time location and report risky driving behaviour.
The insurer offers a premium discount in the range of 5-20%, depending on mileage, on top of a no-claim bonus of 20-50% when policyholders renew their policies. Insured cars with a driving distance of up to 5,000 kilometres a year are given a 20% discount, those with mileage of 5,000-10,000km are offered a 15% discount, those with 10,000-15,000km are given a 10% discount, and those who drove the car 15,000-20,000km receive a 5% discount.
A source at BKI who requested anonymity says telematics device sales have been temporarily suspended as the company works to make its products more competitive.
The expensive price tag of telematics devices relative to premiums could constrain their popularity, making other devices with the same tracking features a potential option for insurance companies.
Maneeratch Sriparivatin, business director at TQLD Co Ltd, an insurance broker, says a Thai insurance company has signed a contract to use a new device that can easily be plugged into car chargers to measure safe driving behaviour in return for insurance premium discounts.
Another product was recently rolled out by Thaivivat Insurance: pay-per-use insurance policies that provide basic fire, theft and accident coverage, depending on the insurance coverage types, during specific periods drivers request it. Thaivivat claims low-mileage drivers would be able to save up to 40% compared with conventional annual insurance policies.
Drivers can buy insurance coverage for a specific time, turning it on via a mobile app to notify the insurer the vehicle is under coverage, and turning it off when the coverage is not wanted.
The idea is similar to prepaid mobile phone packages. Users can top up when the insurance coverage runs out of hours.
Thaivivat offers four packages -- 144 hours for 30 days, 360 hours for 90 days, 600 hours for 180 days and 960 hours for 360 days -- for first class, 2-plus and 3-plus coverage.
PEER-TO-PEER CAR INSURANCE
P2P insurance is a risk-sharing network where a group of associates or individuals pool their premiums to insure against risks. The model encourages people to screen good drivers to join mutual groups in order to receive a premium discount if there are fewer or zero claims.
Carpool Insurance Broker, the country's first P2P insurance broker, lets consumers form their own group with five cars, purchasing first-class motor insurance policies underwritten by Muang Thai Insurance and FPG Insurance through Carpool.
For every 100 baht in premiums paid, Carpool will credit 30 baht on the policy effective date for the pool's damage claims if group members are at fault or are negligent in accidents.
Any claims filed by the group are deducted from the pool first. If the pool amount is insufficient, the insurer covers the difference. Money left over at the end of the policy year is returned as a reward, either as cash back or a discount on the renewal premium. Pools will also be eligible for a 20-50% no-claim bonus if they don't file a claim that year.
The age range for qualified P2P insurance buyers is 20 to 70, with a mandatory driver's licence, and insured cars must have personal registrations not exceeding 10 years.
DIGITAL CLAIMS
Car accidents are always a stressful experience. Dealing with the claims process involving insurance surveyors -- particularly for accidents where you are at fault -- is frustrating and only adds to the stress, so it's no surprise that claimants are increasingly willing to file less-complex claims through the digital channel.
Millennials and fans of efficiency pushed insurance companies and startups to offer mobile apps that can file claims without wasting time waiting to meet insurance surveyors.
"People need insurance companies that better respond to their needs. Electronic claims are filed faster and shorten the time spent on the insurance claim process," says an industry source who requested anonymity.
Claim Di is a mobile app that acts as an intermediary between drivers and insurance companies. The technology makes the claims process faster, allowing claimants to take photos of the car damage as required by their insurance companies and send the images via the app.
The mobile app has many services, including Claim Di Knock for Knock, which lets two parties in an accident make an insurance claim by shaking their mobile phones installed with the app next to each other to file a claim immediately, without waiting for surveyors to arrive at the accident scene.
Claim Di Assist offers roadside assistance to drivers, Claim Di Call is an outsourced call service for insurance companies, and Claim Di Bike is a car accident survey service.
Claimants can search garages and make auto body repair appointments through the app. Those who want to file claims without the other party involved in the accident can also do so via the app.
Moreover, Claim Di provides claims services for 45 of the 47 auto insurance companies in Thailand.
The app has branches in Bangkok and eight provinces: Chiang Mai, Ayutthaya, Khon Kaen, Nakhon Ratchasima, Chon Buri, Prachuap Khiri Khan, Phuket and Songkhla.
The service has 3,500 bikers, respondents who can quickly reach accidents by motorcycle, as well as some 500 mechanics and garages nationwide. Half of Claim Di's bikers are former surveyors at insurance companies.
Kittinan Anuphan, chief executive and founder of Anywhere 2 Go, the developer of Claim Di, says the app is free for consumers and insurance companies to download.
The company does not charge money from consumers, earning revenue from insurance companies when it helps them set up systems such as call centres, facilitates outsourcing of call centre service during off-hours, or assists with surveyor service in remote areas where insurance companies do not have networks.
A sign advertises auto insurance. NATTHITI AMPRAWAN
