As the world of mobility dives into 2024, there are trends that will continue to redefine the motor insurance industry
With dynamic consumer needs and technological innovation, motor insurance in India is witnessing a shift from reactive to proactive approach. Beyond the customary metrics of premiums and coverage, this change is marked by innovative solutions like EV insurance and ‘Pay As You Drive’ plans to combat modern challenges. This not only represents a technological leap, but also a shift in perception when it comes to motor insurance.
As the world of mobility dives into 2024, there are trends that will continue to redefine the motor insurance industry. While motor insurance has long been a mandate by law, policyholders are now seeking ways to be adequately insured beyond a third-party cover. In the era of personalised coverage and added safety layers to motor insurance, here’s outlining what 2024 holds for the future of the industry.
Future-ready with EV insurance
Electric vehicles are often projected to be the future of mobility. And why not? EV sales have skyrocketed in recent years and are expected to soar further in times to come. To put it in perspective, the CY23 saw a whopping 48% increase in EV sales in India. It, therefore, comes as no wonder that the insurance industry is keeping up with this surging demand and mirrors this growth.
Apart from providing comprehensive coverage for EVs, the industry is also seeing the advent of new EV add-ons for added protection. Currently, only a few insurance companies offer EV-specific add-ons that provide coverage for EV battery, battery management system, and battery chargers. EVs are sophisticated machines that warrant extra care and protection. The industry understands this and is effectively catering to the evolving consumer needs and it’s expected that more insurance companies will introduce tailored coverage for EV batteries, BMS systems, and charging infrastructure this year.
Usage-based coverage with PAYD plans
The traditional one-size-fits-all approach in motor insurance is making way for personalised protection. Especially after the way Covid-19 transformed the motor industry, there was a glaring need for solutions that are relevant to the needs of a post-pandemic world. Enter ‘Pay As You Drive’ (PAYD) plans. These usage-based plans enable the policyholder to pay only based on their driving requirements – customers who drive less gets higher discount benefits on insurance premium.
These plans make insurance premium more affordable and attractive for new-age customers. Moreover, these plans offer a more accurate reflection of an individual’s driving habits and usage. Customised coverage is already in demand and with the launch of PAYD plans from insurance companies this year, it will continue to define the motor insurance space.
Rising demand for add-ons
While comprehensive coverage has become a non-negotiable element of motor insurance, often that might fall short too. This is why there has been a considerable surge in demand for add-ons like zero depreciation and engine protection cover. In fact, our recent study reflected that zero-dep cover was the top choice of 95% of brand-new carcar customers and 85% of owners chose this cover for up to the third year of ownership. In the last couple of years, we have observed a stark increase in this demand from customers in higher car ages up to 7-8 years. Not just this, more insurance companies are expanding their add-on offering in higher car ages as well to cater to customer demands. Needless to say, this cover significantly brings down out-of-pocket costs for the policyholder and this is why it’s a popular choice.
Other than this, vehicle owners are recognising the need for added coverage that shields their investment from the aftermath of extreme weather events like cyclones or floods. Insurers are also stepping up with policies designed to offer a safety net in the face of flooding, ensuring that damages are promptly addressed. The surge in demand for engine protection coverage is a result of recognising the engine as the heart of the vehicle. This increased interest indicates that policyholders are ready to take additional measures to safeguard their engines during unexpected incidents.
Technology-driven claims processing: Faster, smarter, efficient
Advancements in technology are not just influencing coverage, but also the claims process. Insurers are embracing artificial intelligence and machine learning for faster and more accurate claims processing. This shift not only reduces the burden on policyholders, but also streamlines the overall insurance experience, making it more efficient and responsive to the needs of the modern driver.
As we traverse into 2024, the motor insurance industry is not merely a legal mandate, but a well-rounded protection shield, adapting to the changing contours of the automotive landscape. With a focus on EVs, personalised plans, and climate-resilient add-ons, the industry is gearing up for a year that promises not just protection, but also innovation in every mile covered.
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