An electronic chip under the car bonnet that can tell a policyholder's driving pattern so that a car policy can be properly priced is what private general insurer Liberty Videocon General Insurance Company Ltd. is experimenting with, said a top company official.
"An electronic chip costing around Rs.800 will be installed in a car. The telematics will tell the manner in which the car was used - average speed at which it is driven, roads travelled and other data. This will give us data to decide on the premium that needs to be charged," Roopam Asthana, CEO and director at Liberty Videocon General Insurance, told reporters here Friday.
"We are doing this with new cars and have tied up with the dealers of several car makers in Mumbai and Ahmedabad. The device has the facility to trace the car and also immobilise it when needed," Asthana added.
Queried about the admissibility of warranty claims by the car manufacturers as the device is fixed at the dealer end and not at the vehicle factory, he said that aspect has been taken care of by the dealers.
He said in future this can be a standard feature in all the cars that are rolled out.
Meanwhile, the 27th and the latest player in the non-life insurance sector hopes to break even in the sixth year of operations while the target for the current year is Rs.100 crore.
"In India, a general insurer breaks even when the gross premium income touches Rs.1,200 crore. At that time our capital base will be around Rs.600 crore," Asthana said.
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According to him, the domestic general insurance sector is expected to touch a gross premium figure of $59 billion in ten years from the current $12.5 billion - which shows there is good potential for more players to enter the market.
On the company's distribution network, he said there will be eight branches during the first year and the number would go up to 25 during the second year of operations.
"We will expand our distribution network based on our experience with the existing branches," he added.
He said the Rs.350 crore equity based company will have a distribution channel that comprises of brokers, auto-dealers, individual agents and banks.
On the products side the company has around 30 products in its portfolio and is awaiting the insurance regulator's clearance for health and personal accident insurance policies.