 "Hybrid workers drive demand for pay as you drive insurance plans")
The demand for pay-as-you-drive (PAYD) plans in motor insurance has increased by 25 per cent among its largest customer base — hybrid workers — due to favourable regulatory guidelines.
In the master circular issued in June, the Insurance Regulatory and Development Authority of India (Irdai) directed insurers to offer additional options like PAYD and pay-as-you-go as a primary choice for customers.
According to a recent study by PolicyBazaar, hybrid or work-from-home owners, who account for 35 per cent of the PAYD market, have seen a 25 per cent rise in demand for such plans compared to last year.
At the same time, households with multiple cars have seen a 50 per cent surge in demand for PAYD from the previous year. Homemakers, who account for 15 per cent of PAYD customers, have seen a 30 per cent increase in demand.
“Irdai’s latest guideline, asking insurers to offer PAYD plans as a first choice for customers, is a welcome move poised to boost PAYD adoption. This initiative will usher in a new era of customised insurance, making motor insurance a more personalised and customer-centric offering,” PolicyBazaar said.
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The study also indicates an increase in preference for add-ons, including zero depreciation cover, consumable cover, engine protector, and return-to-invoice cover among customers. These options underscore the importance of vehicle value maintenance.
The insurance regulator had permitted general insurers to introduce PAYD and pay-how-you-drive (PHYD) for motor insurance coverage in 2022.
On Tuesday, Zuno General Insurance launched a PHYD add-on coverage option for customers, which links their driving behaviour to their vehicle insurance premium.
The new add-on coverage is available with private car packages and private car standalone own-damage policies. This option will enable users to assess their driving skills and earn a Zuno Driving Quotient, along with rewards for driving safely. The insurer will encourage this behaviour by offering discounts of up to 30 per cent on insurance renewal premiums with PHYD. This add-on feature will be available across the company’s distribution channels.
“This (PHYD) will also give customers greater control over their insurance pricing, personalising it, which will be a departure from the current pricing approach,” said Shanai Ghosh, managing director and chief executive officer of Zuno General Insurance.
“…Amid the surge in natural calamities, there has also been an increase in demand for engine protection in certain regions from our policyholders,” Ghosh added.