Fifty eight percent of millennials and GenZs are aware of usage-based insurance (UBI). Rewards for ‘safe driving’ and ‘Driving score’ are the top two influential factors to opt for usage-based insurance, according to a latest study.
The study titled ‘Usage Based Insurance: Decoding Awareness, Perception and Behaviour’, by Zuno General Insurance (Zuno GI) (formerly Edelweiss General Insurance) was done to understand millennial and GenZs’ awareness, understanding and consideration for UBI.
The concept of usage-based insurance still has low awareness in the country.
65% of respondents feel that people in India are safe drivers. 90% of respondents want to get a driving score that indicates how safe they drive.
58% respondents of the study are aware of usage-based insurance, while 70% respondents have strong intention to buy usage-based insurance over other insurance options.
The study added that 76% respondents strongly believe that getting a driving score will help improve their driving skills and 95% respondents believe rewarding safe driving will positively influence driving behaviour.
What is Usage-Based Insurance (UBI)?
Usage-based insurance is a concept that personalises car insurance according to how you use, how much you use and how you drive.
Conventional Insurance in India, on the other hand, primarily calculates premium based on what and where you drive Distance/time travelled and your driving behaviour are two important factors that decide your car insurance premium.
Usage-based insurance calibrates your premium to how much you drive, so if you drive less you pay less.
Further, the insurance company uses data such as driving speed, acceleration rate, sudden braking, distracted driving and whether you use the phone while driving, to calculate a score for your driving and rewards you based on the driving score.
Such data is collected either through a device attached to your car or through an app on the phone.
Shanai Ghosh, MD and CEO, Zuno General Insurance, said, “We sought to assess the understanding and perception of UBI among young, mobile savvy Indian customers. The findings have been extremely insightful and have validated our conviction about the potential of UBI in India, encouraging us to continue investing in this category that we pioneered in 2020.”
“Given the exponential growth of smartphone users in the country, telematics-based solutions will appeal to the digital natives, empowering them to see and influence the pricing they get on motor insurance. With the findings of the report, we wish to drive awareness of new concepts like UBI which will not only link premium to your usage and driving but also encourage safe driving practices in the country,” Shanai added.
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