Innovative Partnership with TaxieCo Revives Hong Kong’s Taxi Insurance Industry
Lockton Companies Hong Kong, an independent insurance brokerage, has secured the prestigious Auto Insurance Initiative of the Year – Hong Kong award at the Insurance Asia Awards 2024. This accolade recognizes their successful collaboration with telematics tech startup TaxieCo, aimed at revitalizing the taxi insurance sector, which has long been plagued by underwriting losses.
The partnership between Lockton and TaxieCo has leveraged the power of big data to convert live telematics driving data into usage-based insurance (UBI) data. This innovative approach provides a robust supplement to the traditionally limited data used by insurance companies, marking a significant advancement in the industry.
For over a decade, Hong Kong’s taxi insurance market has faced substantial challenges, recording underwriting losses in 10 out of the past 15 years, amounting to over HK$323 million. Despite an increase in average annual premiums per vehicle, the market’s profitability remained elusive, further exacerbated by the region’s ageing population. This challenging environment has deterred new entrants and adversely impacted the livelihoods of many.
Over the past two years, Lockton and TaxieCo have made remarkable strides in this stagnant industry. They have emerged as market leaders, with the highest number of taxis equipped with the telematics device “T-Box” in Hong Kong. Notably, they are the sole providers of risk relativity data for insurers in the region.
Their pioneering work involves using statistical modeling techniques to transform telematics data into underwriting relativities. This has illuminated the taxi insurance landscape by identifying specific driving behaviors that lead to accidents. Additionally, the ongoing statistics provided to taxi managers and owners help monitor driver diligence and caution.
This breakthrough has garnered significant attention from insurers within the taxi insurance industry, attracting new players eager to incorporate UBI into their underwriting models. This shift represents a move away from traditional underwriting methods towards a data-driven future, enhancing the industry’s overall competitiveness.
The growing adoption of the UBI model by insurers has revitalized the taxi industry, evidenced by more competitive market premiums for taxis with better ratings, now identifiable through telematics data.
The initiative has also received strong support from various government agencies, which have provided subsidies and technology vouchers to bolster the project and align with the Government’s Smart City Blueprint. As more taxis install the T-Box device and gain recognition from insurers, the project’s innovative reach is expanding to commercial fleets across jurisdictions. Lockton anticipates new business opportunities in micro-insurance and digital marketing platforms as the T-Box device evolves to capture additional data.
“Fleet operators benefit from greater transparency, insurers gain more detailed underwriting and claims information, owners enjoy more competitive premiums, and drivers and passengers experience increased efficiency and improved road safety. The UBI model’s flexibility accommodates the needs of all stakeholders,” Lockton stated.
The Insurance Asia Awards celebrate companies that redefine traditional boundaries through groundbreaking innovation, leaving a profound impact on customers and the industry. Lockton Companies Hong Kong’s achievement exemplifies this spirit, heralding a new era for the taxi insurance industry.
