In the dynamic realm of Australian car insurance, the year 2024 is poised to witness a notable transformation driven by the surge in popularity of usage-based insurance (UBI).
KOBA, an InsurTech motor insurance distributor, has marked a significant milestone with its ‘pay as you drive’ (PAYD) model. This innovative approach bases premiums on real-time tracked distances, aligning seamlessly with a burgeoning consumer preference for flexible insurance solutions.
Concurrently, ROLLiN, a subsidiary of the Insurance Australia Group, is exploring the ‘pay how you drive’ (PHYD) concept with its Safe n’ Save product. This initiative assesses driving behaviors, including speed and braking, through a dedicated smartphone app. Initially catering to business customers, ROLLiN contemplates extending this offering to a broader audience.
These developments, mirroring global trends favoring personalized and behavior-centric insurance models, indicate that 2024 may emerge as the pivotal year for widespread acceptance of UBI in Australia.
Industry experts at Mozo anticipate the introduction of a ‘pay how you drive’ car insurance option for the general public later in 2024.
In the automotive sector, the market share of Electric Vehicles (EVs) and Hybrid Electric Vehicles (HEVs) surged to 8.4% in early 2023, a trend anticipated to gain further momentum.
Despite the economic advantages of driving EVs and HEVs, these vehicles often carry unique risk profiles and higher repair costs compared to traditional counterparts. Insurers are grappling with the challenge of accommodating these nuances, prompting predictions that bespoke policies tailored to EVs and HEVs will become increasingly prevalent.
As this segment expands, there’s potential for a transformative impact on the structure and pricing of insurance for all drivers. Mozo suggests that 2024 might witness the issuance of the first EV-specific insurance policies in Australia.
Furthermore, in 2024, advancements in Artificial Intelligence (AI) are expected to revolutionize claims processing efficiency and pave the way for the development of personalized insurance products based on driving data.
These innovations are part of a broader trend towards digitization and customized customer experiences. Mozo predicts that insurance company-developed chatbots will become indispensable tools in 2024, contributing to more streamlined and user-friendly interactions within the insurance landscape.
