Constituent policy

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

Edelweiss General Insurance (EGI) has launched SWITCH, a comprehensive on-demand car insurance product, as part of IRDAI’s Sandbox initiative. SWITCH is a mobile telematics-based digital auto policy that helps customers save money on auto insurance premiums by following good driving practices. Additionally, additional savings can be realized by turning off the policy when the vehicle is not in use.

Ahead of SWITCH’s launch today (July 4, 2022), Shanai Ghosh, Executive Director and CEO of Edelweiss General Insurance, shared full policy details in an email interaction with FE Online. Edited excerpts:

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

The answer to this question lies in another question, namely, would you like to pay for what you don’t use? Customers are increasingly demanding simple and personalized automobile insurance solutions. They want to control what they use and only pay for what they use. Car insurance is necessary to protect your vehicle against uncertain events and currently must be paid for the whole year, regardless of the use of the vehicle. Taking note of changing consumer behavior and expectations, we have leveraged the IRDAI Sandbox platform to deliver usage-based auto insurance in the Indian market.

The Sandbox enables digital insurers like us to deliver innovative product propositions that work well for today’s digital customers, giving them much-needed personalization and control, along with cost savings, convenience and ease. In my opinion, usage-based auto insurance is here to stay. I hope that what falls under the Sandbox program will soon become a mainstream product, for the benefit of consumers.

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

The driving score measures safe driving. It measures the quality and safety of your driving. The driving score is given on a scale from 0 to 100. The higher the score, the better the driver. SWITCH generates a driving score in real time and dynamically assesses the premium. Customers are given a driving score based on several driving habits such as speeding, hard braking, distracted driving, etc.

How is the premium for this product calculated?

The policy covers all risks related to the vehicle. The premium paid has an annual and a monthly component. The annual component covers Fire/Theft/Burglary/Cas of God/Third Party coverage and is always active. Accident insurance that covers damage to your car in the event of an accident while driving is what can be turned on and off. This is a daily rate and depending on the number of days your accident insurance is activated, the premium is charged.

We also have a grid that relates the driving score to a discount or loadout. So once the usage-based bonus is calculated, we apply the discount based on the customer’s driving score.

Typically we expect the customer to pay an initial premium for all annual components and around 2 months premium for the accidental cover portion. This is credited to a wallet managed by the client’s account. Thereafter, we charge the customer’s credit or debit card monthly for the premium calculated above. Customers can also choose to pay the full premium up front, in which case the savings are accumulated in the policy.

How can customer save money with Switch?

Bonuses are determined using both vehicle and driver details, such as driver age and driving experience. The premium is charged only on the days the vehicle is used and thus savings are made on days when the vehicle is not used. Premiums are further reduced based on the driving behavior recorded by the app and the reduction can reach 50% of the daily charge. This is in addition to the savings made when you don’t pay on the days you don’t drive.

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

How can a driver improve his driving score?

Your driving score is based on several parameters such as speeding, distracted driving, hard braking, etc. SWITCH gives you a score on each parameter, giving you the opportunity to analyze and correct your trajectory and therefore improve your score. So, watch out for speeding, using cell phones 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 allows customers to pay for what they use. It allows users to link their premium to usage. So on days when you’re not using the car, you can deactivate your insurance and save
  • Policyholders will no longer need to activate the contract if they use their car, the application will do it for them.
  • Fully digital and mobile telematics-based automotive policing
  • The app detects movement and automatically activates insurance when the vehicle is driven, making it convenient and hassle-free for the customer.
  • Encourage good behavior. 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 auto insurance premiums monthly based on usage.

Who should buy SWITCH?

SWITCH is for anyone looking for personalized solutions and wanting to have full control over what they use and pay for. Anyone wishing to renew their car insurance or take out a new one is a potential customer for us. The product will also appeal to customers who do not drive their car every day or have multiple vehicles that are not used equally. It would also attract people who think they are good, safe drivers and should therefore pay less than those who are not.

(The opinions expressed above are those of the CEO of EGI only. Please read the insurance document carefully or consult your insurance advisor before purchasing an automobile policy)