Usage-based insurance in India and the role of blockchain vehicle passports

As the introduction of tech-enabled motor insurance products accelerates in India, we analyze the various techniques for collecting data for usage-based insurance and look at the role of blockchain in enabling an ecosystem for B2B data sharing.

In an effort to boost technology-enabled insurance, India’s insurance regulator, the Insurance Regulatory and Development Authority of India (IRDAI), in July this year permitted general insurance companies to introduce concepts such as “pay as you drive” and “pay how you drive” for own damage (OD) coverage. Following the announcement, activity in the usage-based insurance (UBI) space, a type of motor insurance that tracks mileage and driving behaviors, has picked up and should gather pace as more insurers integrate telematics into their products. While traditional auto insurance utilizes factors such as age, location, and driving experience to calculate insurance premiums, UBI monitors a person’s driving style and frequency to more closely align driving behaviors with premium rates.