In partnership with insurer NTUC Income, online automotive marketplace Carro has launched Singapore’s first true usage-based insurance (UBI) programme bundled exclusively into its car subscription service.
Supported by vehicular telematics, the new initiative seeks to lower the costs of driving in Singapore and promote greater flexibility through its pay-as-you-drive model which means drivers will pay less for insurance premiums if they drive lesser.
This technology tracks a driver’s mileage and sends that data to a backend server to calculate monthly insurance premiums.
In comparison, traditional auto insurance charges an annual premium based on the type of coverage chosen as well as the profile of the driver including driving experience and claim history. Insurers also consider the type of car, its engine capacity and age. However, they do not consider how much the car has been used.
Currently, telematics is being used by various insurers to reward safe driving behaviour by assessing a driver’s risks but discounts are only given after drivers have proven that they are safe drivers through the data tracked via telematics devices.
This article first appeared on Asian Insurance Review, written by Ranamita Chakraborty.