EGI’s SWITCH motor policy rewards good drivers, helps them save on non-driving days. Here’s how it works

Edelweiss General Insurance (EGI) has launched SWITCH, an on-demand comprehensive motor insurance product, under the IRDAI’s Sandbox initiative. SWITCH is a digital, mobile telematics-based motor policy which allows customers to save money on motor insurance premiums by following good driving practices. Moreover, further savings can be done by switching off the policy when the vehicle is not in use.

Ahead of the launch of SWITCH today (July 4, 2022), Shanai Ghosh, Executive Director and CEO, of Edelweiss General Insurance, shared all details of the policy in an e-mail interaction with FE Online. Edited Excerpts:

Why is there a need for usage-based motor insurance policies in India?

The answer to this question lies in another question, which is, would you like to pay for what you don’t use? Customers are increasingly demanding simple, personalised motor insurance solutions. They want to be in control of what they use and pay only as per usage. Motor insurance is necessary to protect your vehicle against uncertain events and currently, it needs to be paid for the entire year irrespective of vehicle usage. Taking note of the change in consumer behaviour and expectations, we have leveraged the IRDAI Sandbox platform to bring usage-based motor insurance to the Indian market.

The Sandbox allows digital insurers like us to come up with innovative product propositions that work well for today’s digital customers, giving them the much-needed personalisation and control, along with savings, convenience, and ease. In my opinion, usage-based motor insurance is here to stay. I am hoping that what is under the Sandbox programme, will become a mainstream product soon, benefiting consumers.

What is a driving score? How will it be calculated?

Driving score measures safe driving. It measures how well and how safely you drive. The driving score is given on a scale of 0 to 100. The higher the score, the better the driver. SWITCH generates a real-time driving score and dynamically rates the premium. Customers are given a driving score based on several driving habits such as overspeeding, sudden braking, distracted driving, etc.

How is the premium of this product calculated?

The policy covers all risks associated with the vehicle. The premium paid has an annual and a monthly component. The annual component covers Fire/Theft/Burglary/Acts of God/Third party coverage and is always on. Accidental Insurance which covers the damage to your car in case of an accident while being driven is what can be switched on and off. This has a per-day rate and depending on the number of days your accidental insurance is switched on, the premium is charged.

We also have a grid which links driving score to a discount or loading. So once the premium based on usage is calculated, we apply the discount based on the driving score for the customer.

Typically, we expect the customer to pay an upfront premium for all the annual components and about 2 months premium for the accidental coverage part. This is credited to a wallet maintained by the customer’s account. Thereafter, every month we debit the customer’s credit or debit card with the premium as calculated above. The customers can also choose to pay the entire premium upfront, in which case the savings get accumulated in the policy.

How can the customer save money with Switch?

Premiums are determined using both vehicle and driver details like driver age and driving experience. The premium is charged only on the days the vehicle is used and thus savings are made on days the vehicle isn’t used. The premiums are further discounted based on the driving behaviour the app records and the discounting can be as high as 50% of per day charge. This is over and above the savings made when you don’t pay on non-driving days.

For a good driver, driving 3-4 days a week, the savings can go up to 60% of their current insurance premium.

How can a driver improve his driving score?

Your driving score is based on several parameters like overspeeding, distracted driving, sudden braking, etc. SWITCH gives you a score on each parameter, giving you the opportunity to analyse and course correct and therefore improve your score. So, please be careful of overspeeding, use of mobiles or any distractions, applying sudden breaks, etc. while driving. Making a conscious effort will help improve your score and make you a better driver in the process.

Key features of Switch

• SWITCH lets customers pay for what they use. It allows users to link their premium to usage – so on the days you don’t use the car, you can switch off your insurance and save
• Policyholders will no longer need to switch on the policy if they use their car, the app will do it for them.
• Completely digital, mobile telematics-based motor policy
• The app detects motion and automatically activates insurance when the vehicle is driven, making it convenient and hassle-free for the customer
• Encourages good driving. Customers can save more throughout the year. The better you drive, the more you save on your insurance premium.
• It is Subscription-based. Customers can now pay Motor Insurance premiums monthly as per usage.

Who should buy SWITCH?

SWITCH is for anyone looking for personalised solutions and wanting to be in complete control of what they use and pay for. Anyone who wants to renew their motor insurance or buy a new one is a potential customer for us. The product will also appeal to customers who are not driving their cars every day or have multiple vehicles not used in equal measure. It would also appeal to people who believe they are good and safe drivers and should therefore be paying less than those who are not.

(Views expressed above are those of the EGI’s CEO only. Please read the insurance document carefully or consult your insurance advisor before buying any motor policy)