ACADEMIC TASK NO.

3
Mittal School of Business

Course Code: FIN 513 Course Title: Banking and Insurance

Course Instructor: Dr. S. Hari Babu

Academic Task No.: 3 Academic Task Title: Case based presentation

Date of Allotment: 04/09/2018 Date of submission: 05/11/2018

Student’s Roll no: A07 Student’s Reg. no: 11811791

Name: Alok Singh Section: Q1855

Learning Outcomes: (Student to write briefly about learnings obtained from the academic tasks
Declaration:

I declare that this Assignment is my individual work. I have not copied it from any other student’s
work or from any other source except where due acknowledgement is made explicitly in the text,
nor has any part been written for me by any other person.
Student’s Signature:
Evaluator’s comments (For Instructor’s use only)
Evaluator’s Signature and Date:
General Observations Suggestions for Improvement Best part of assignment

Marks Obtained: _______________ Max. Marks: _____________

 INTRODUCTION

Usage- based vehicle insurance is also called as pay as you drive and pay how you drive and
kilometer-based insurance is a type of insurance policy whereby the cost of premium is
dependent upon the various factors related with the car and the policy holder itself such as type
of vehicle used, place and behavior, time duration and distance these are few parameters for
measurement of premium.
This type of policy is different form the traditional insurance policy, it differentiates and benefits
“safe”. The drivers, a no claimed bonus or a / lower rate of premium. Anyhow conventional
differentiate shows history rather than considering the present behavior of the policy taker. So, it
may take long time before reckless or become more safer pattern of driving and convert it
lifestyle through into insurance premium.

Why usage-based vehicle insurance is stand to take off soon:

• The insurance company developing the technological platform to go more advance, in
usage-based vehicle insurance it requires data transmission, data analytics, data
management, security and much more. Therefore, the companies are invested or investing
in the technology to get and transfer the driving data.

• It allows to gather the user data and transmit through pre-installed or being fit by the
company and there are also some alternatives such as mobile phone and GPS. Which will
help in the fixing up the premium rates according to the customer and the usage.

• Insurance company have to get more skilled to analyze the data being collected from the
existing customers or from the potential customers and it will become the part of large
system of big data. It will help the company to become customer centric the users of this
policy will get benefits.

• In experience in the US and European countries indicates that the customers are
comfortable with sharing their driving data with insurance company. Information which
includes location, travel options, fitness information, vehicle information. More people
are now willing to share their personal lives information.

• It provides control over the amount of premium paid by the consumer. It attracts the
customers because it also enables them to improve their measurement of risk.
For the love of information

Usage based vehicle insurance policy is not new. It i firstly introduced one of the oldest companies in the
business, octo telematics, has been around since 2002. But the idea has never really being accepted.
Recently octo acquired by a large Russian business conglomerate.
In the US at initial stage around 2 million people signed up its program since 2008. But still there are
more than 250 million cars on road and still counting (according to HIS automotive) a research firm.

In the UK and Italy people show more enthusiasm than people from other countries. It in this between 15-
18% insurance policy are telematics based according to Deloitte, however it will increase to 30-40% of
British policy by 2020.
 NEED OF STUDY

Usage based vehicle insurance policy is now bringing change in the existing business model of
vehicle insurance. The traditional model is based upon on driver related information and the risk
related personal information. Studies showed that there are various other variables and
personalities which have momentous impact on driving risk and insurance pricing. A driving
behavior can be a powerful forecaster for assessing the individual driving risk.
Insurance companies have been trying to attract the customers to avail more motor insurance
policy and to pay premium there by the usage-based policy being introduced in the market still
companies are not able to convince the customer to buy and pay premium based on their driving
pattern and behavior.
According to the survey conducted for the research people have questions like “it lowers the
premium logically or its just a cover to charge as per the income and need of the consumer?”
“will the insurance company charge more if they get to know too much personal information and
the past records?”
Therefor it is very significant to find the way to launch the usages-based insurance policy at large
scale. The insurance companies and researcher are still trying to figure out the appropriate path
to launch the product so that customer voluntarily avail the policy.
The main aim to find out will the consumer acceptance of the concept of usage based premium
pricing model and the reasons for the decision making. And what kind of improvement can be
made to make it more acceptable.
 DATA ANALYSIS AND INTERPRTATION

Explanation of variables and their measurement

The main focus of this research study is falls under two categories and the relationship between
these two categories first is the construct proposed for study and the second is measurement of
the construct. Construct is just a conceptual term to describe a phenomenon of theoretical interest
to the researcher, and the data which is being collected is impossible to study directly (e.g.
consumer satisfaction, trust and faith, loyalty etc.). A measure is a quantifiable assessment and
justification of the data which is being collected which reflect the respondent’s behavior in term
of either agreement of disagreement is collected with the help of pa predetermined questionnaire
which cover all the relevant information require for study.

The aim of study to find the relationship between the variables which is not directly measurable.
Definition of construct used in study.
Construct Definition
(PIB) Perceived individual benefits Degree to which a person thinks or believe
that the adoption of new policy or terms and
condition would provide certain benefits to
his/her requirements.

(PSB) Perceived social benefits Degree to which a person consider that

adoption of new policy would give benefits to
the society.

(PEU) Perceived ease of understanding Degree to which a person admits that the term
and conditions, content is easy to understand
simple and the transparency is there.

(PPR) Perceived privacy risk Degree to which person believe that adoption
of new policy or application would be a risk
to his/her privacy and personal lives.

(PV) Perceived value Degree to which a person has a perspective

that he/she is gaining much more than they
sacrifice.

(AI) Acceptance intention The intensity of favorable intensions

developed by the individual since the impact
of various perceptions the individual have.
 Source: www.sciencedirect.com

Details of indicators used to measure constructs

Construct Survey questions (indicators)

(PIB) Perceived individual benefits Usage based pricing will provide me an

opportunity to save money by limiting my usage.

Usage based pricing will increase economic

efficiency as users will be motivated to control
their unnecessary usage

Usage based pricing will make insurance more

affordable to customers of all income groups.

Usage based pricing is more progressive as users

will benefit from their efforts to limit usage.

Usage based pricing is fairer and more justifiable

because low users will be paying less premium
than those who use their vehicles more.

(PSB) Perceived social benefits Usage based pricing will reduce traffic congestion
as users will tend to reduce use.

Usage based pricing will increase the feeling of

safety on the roads.

Usage based pricing will reduce air pollution.

 Usage based pricing will help in preservation of
fuel resources.

Usage based pricing will increase parking space in

the areas meant for parking.

(PEU) Perceived ease of understanding The conditions mentioned in the policy statement
should be clear and easily understandable

The method for calculation of premium should be

well explained.

The contents should be in simple language for

easy understanding

The monitoring of usage should be done without

any confusion regarding procedures.

(PPR) Perceived privacy risk I feel insecure if someone comes to know about
my travel history

I would prefer to maintain secrecy about places

visited by me during my travel

I feel my safety will be at risk if my travel plans

are revealed to others.

I may have accidents if I feel that someone is

closely watching me.

(PV) Perceived value I feel that usage-based pricing will offer more
value for my money.

The benefits of usage-based pricing exceed the

expenditure for availing insurance.

I believe that the usage-based pricing policy will

properly reward my efforts aimed at limiting my
usage of the vehicle.

(AI) Acceptance intention I feel the concept is relevant and worth trying

I feel such innovations are the need of the hour to

satisfy low usage customers.

I feel usage-based pricing is better than existing

premium rating methods.
Data analysis
To analyze the relationship between to two factors, data is being collected from 55 respondents
using the structured questionnaire those who have driving license and eligible to buy motor
insurance. The questionnaire was designed in six parts. The question is designed were closed
ended questions, where the 5-point Likert scales is used varying from strongly disagree to
strongly agree. The population includes all the individual owing 2-wheeler or 4-wheeler or both.
The data is collected with the help of google survey form.

information is being collected from 55 individual out of which 36 is male (65.5%) and 19 is
female (34.5%)
source: https://docs.google.com/forms

The respondent also asked to give details of which vehicle they are currently using its 2-wheeler
or 4-wheeler it helps to collect more precise data. 32 individuals out of 55 (58%) are using 2-
wheeler on daily bases and the rest are using 4-wheeler which is 23 out of 55 (42%).
source: https://docs.google.com/forms
A pre-launch exploration of customer acceptance of usage-based vehicle insurance policy

(PIB) Perceived individual benefits

(It means the benefits that a insure taker will receive directly after taking this usage-based
vehicle insurance and it will help to save money and reduce efforts of the individual.)
• Usage based pricing will provide me an opportunity to save money by limiting my usage.
• Usage based pricing will increase economic efficiency as users will be motivated to
control their unnecessary usage
• Usage based pricing will make insurance more affordable to customers of all income
groups.
• Usage based pricing is more progressive as users will benefit from their efforts to limit
usage.
• Usage based pricing is fairer and more justifiable because low users will be paying less
premium than those who use their vehicles more.
Analysis:
• Usage based pricing will provide me an opportunity to save money by limiting my usage.
This question is related with the perception of people if they think it will help them an
opportunity to save the money or not. So according to the survey 36% i.e. 18 people
strongly agree and 17 people agree that makes a total of 35 people i.e. around 64% are in
the favor of this statement whereas 17 people i.e. 30% is still not sure about it however
the remaining 3 people i.e.5% are strongly disagree or disagree.

• Usage based pricing will increase economic efficiency as users will be motivated to
control their unnecessary usage. in this question its related with the control over
unnecessary usage of vehicle and control over it after taking the insurance policy. It will
provide benefit to the insurance holder as he will able to monitor how much he is using as
per according to his needs. As per the survey total of 36 people i.e. 65% are either
strongly agree or agree still 15 people i.e. 27% are still not sure and however 4 people i.e.
7% either strongly disagree or disagree.
• Usage based pricing will make insurance more affordable to customers of all income
groups. This question is related with the price and the affordability of the insurance
policy. The perineum is according to the usage which will help to reduce the premium
and make it more affordable to middle- and lower-income group.as per the survey total of
31 people i.e. 56% more than half either strongly agree or agree and 19 people i.e. 34%
are still note sure about it. And the remaining 5 people i.e.9% are in the favor of strongly
disagree or disagree.
• Usage based pricing is more progressive as users will benefit from their efforts to limit
usage. this question is related with the progress and monitoring of usages-based vehicle
policy that allows the customer to try to limit the use of vehicle to get maximum benefits
from the policy. As per the data total 30 people i.e. 54% are strongly agree or agree
whereas 19 people i.e.34% people are still note sure about it and the remaining 6 people
i.e. Around 10 % people are disagree or strongly disagree.
• Usage based pricing is fairer and more justifiable because low users will be paying less
premium than those who use their vehicles more. This question asked to find out what
people think if the insurance policy is providing them a transparent and justifiable
explanation of insurance rates which they are going to be charged if the buy the policy. It
also helps to control the rate of premium and other expenses. So, 36 people i.e.65% are in
the favor of strongly agree or agree and 13 people i.e. 23 people are still note sure about
it, and the last 6 people i.e. 10% are either strongly disagree or disagree.
 ❖ So as per the data more than 50% of people thinks that it provides more benefits
to the individual in various term such as saving of money, reduction in
unnecessary usage of vehicle, affordable to all income groups also and its fairer
than the existing premium rate system because those who have less usage don’t
have to pay high premium.

(PSB) Perceived social benefits

(perceived social benefits are the effects or changes on the society through this policy of usage-
based pricing because people will monitor and control there usage so ultimately it provides
benefits to the society such as less traffic low pollution, road safety, preservation of fuel etc.)

• Usage based pricing will reduce traffic congestion as users will tend to reduce usage.
• Usage based pricing will increase the feeling of safety on the roads.
• Usage based pricing will reduce air pollution.
• Usage based pricing will help in preservation of fuel resources.
• Usage based pricing will increase parking space in the areas meant for parking.
Analysis:
• Usage based pricing will reduce traffic congestion as users will tend to reduce usage. this
question related with the reduction on road traffic after adoption of usage based policy.to
control the premium people tend to use the vehicle only when required and due to this
there will be less road traffic. As per the survey 30 people i.e. 54% are either strongly
agree or agree still there are quite a good no of people who are not sure about it i.e. 19
people around 34% and the remaining are chosen strongly disagree or disagree which is 6
people i.e. approx. 11%.

• Usage based pricing will increase the feeling of safety on the roads. This question is
related with the previous one the reason is if there is less traffic the chances of accident o
any mis happening will be less and people will feel safer while walking on pedestrian or
driving their vehicle. So as per the survey data out of 55 people 32 people i.e. 58% ticked
either strongly agree or agree whereas 20 i.e. 36% people are still not sure about it
meanwhile only 3 people i.e. approx. 5% are ticked option either strongly disagree or
disagree.

• Usage based pricing will reduce air pollution. The usage-based pricing policy will reduce
the pollution because the policy holder tries to keep the premium as low as possible for
that they may reduce the usage and thereby it will reduce the overall air pollution not on a
high scale but it has to start from somewhere. So as per the survey data 27 people i.e.
49% are strongly agree or agree which is less than half .23 people i.e. 41% are not sure
about it and 5 people i.e.9% are strongly disagree or disagree.

• Usage based pricing will help in preservation of fuel resources. The usage-based policy
will help in the preservation of fuel and gases which is used to run vehicle, when
customer get to know that the usage will increase the premium, they may reduce the
usage so in that way the expenses incurred on fuel will also reduce and there will be low
demand for the fuels which will help in preservation. So as per the survey data 34 people
out of 55 i.e. 62% are strongly agree or agree, meanwhile 20 people i.e.36% are not sure
about if it will help or not and the remaining 1 person i.e. approx. 2% are strongly
disagree or disagree.

• Usage based pricing will increase parking space in the areas meant for parking. Usage
based parking will reduce the parking space either at home or at some parking place in
case of increase or decrease it will be a vey small no. but it going to affect overall space
management. 29 people i.e. 52% are strongly agree or agree and 20 people i.e. 36% are
note sure about it and the remaining 6 people are strongly disagree or disagree.
 ❖ In Perceived social benefits people also consider it as good fore society from
different perspective 55% are in the favor of this the rest are still are either note
sure or disagree to this according to the data it indicates the people are conscious
about what happen to the society, the people who are unsure there can be n no. of
reasons for that but it can be solved if they get to know detailed explanations and
various related factors.

(PEU) Perceived ease of understanding

(Ease of understanding is the clarity and transparency which will be provided by the insurance
company in this usage-based insurance policy which will help the customer to calculate the
overall premium and other related thing and the language and other technical jargons should be
consider under this.)
• The conditions mentioned in the policy statement should be clear and easily
understandable
• The method for calculation of premium should be well explained.
• The contents should be in simple language for easy understanding
• The monitoring of usage should be done without any confusion regarding procedures.
Analysis:
• The conditions mentioned in the policy statement should be clear and easily
understandable. This question is showing the complexity of terms and conditions which
is going to be mentioned in the policy it can be a bad or good sign for the policy if the
policy have complex terms and conditions it will have adverse effect on adoption of this
usage-based insurance policy.so it should be clear and easy. According to the data 32
people out of 55 i.e. 58% are strongly agree or agree which is more than half, 18 people
i.e.32% are not sure about it and 5 people i.e.9% are strongly disagree or disagree.
• The method for calculation of premium should be well explained. This question is about
the calculation of premium rates will be done by the insurance company so the customers
wants that the premium calculation should be easy and easy to understand so that its easy
for them to cross check If they have any doubt that the company is charging more that the
promised premium. So according to the survey 32 people i.e.58% are strongly agree or
agree, 16 people i.e. 29% are not sure about it might be due to unawareness of method
picked by insurance company for premium rate calculation and 7 people i.e.12% are
strongly disagree or disagree.

• The contents should be in simple language for easy understanding. This question is
indicating towards the content and language which is used to explain the terms and
conditions to the customer so that he/she will be able to understand it more clearly.so
should it be made easier for understand. As per the survey data 40 people out of 55 i.e.
72% are strongly agree or agree that it should be in an easy language, 11 people i.e. 20%
are not sure about it and rest 4 people i.e. 7% are strongly disagree or disagree.

• The monitoring of usage should be done without any confusion regarding procedures.
This question related with the procedure of collecting data from the customer through
various ways such as online transmission, installation of some device into the car to
collect data. So, it should be in an easier way so that the consumer won’t get interference
while doing some work. According to the survey 35 people out of 55 i.e. approx. 64% are
strongly agree or agree that is should be done without any confusion reading
procedure,17 people i.e.31% approx. are still not sure about it and the rest 3 i.e. 5%
approx. are either strongly disagree or disagree.

❖ Perceived ease of understanding in this people are in the favor of that the usage-
based policy should be easier to understand with proper clarity and transparency
so that they can take right decision and make changes as per they want without
getting confused regardless to the procedures that company follows to calculate
the insurance premium rates.
 (PPR) Perceived privacy risk
(perceived privacy risk is related with the risk which will arise to due to access of more
information by the insurance company which will bring the customer into various kind of risk it
can be anything but its very hard to say what will be the impact but it surely effects the
customer)
• I feel insecure if someone comes to know about my travel history
• I would prefer to maintain secrecy about places visited by me during my travel
• I feel my safety will be at risk if my travel plans are revealed to others.
• I may have accidents if I feel that someone is closely watching me.

Analysis:
• I feel insecure if someone comes to know about my travel history. It can be the
assumption made by the customer that he will be unsecure if the information that he
providing to the insurance company seen by some third party or any outsider it will
cost him some how if this kind of thing happen to him. As per the survey 29 people
i.e.52% are strongly agree or agree that they feel little insecure,17 people 30% people
are not sure about it and the 9 people i.e.16% strongly disagree or disagree.
• I would prefer to maintain secrecy about places visited by me during my travel. In this
it is checked whether the customer wants to reveal it or not his destination of visit due
to some personal factors, if he doesn’t want to reveal it might be consider as
breaching of one principle of insurance. So as per the data 32 people i.e.58% are
strongly agree or agree that they want to main secrecy about the places visited, 17
people i.e.30% are still note sure about it and the 6 people i.e. approx. 11% are
strongly disagree or disagree.

• I feel my safety will be at risk if my travel plans are revealed to others. This question
shows the degree of what would be the safety he/she feels under this usage based
premium policy. Its all works on assumption and perception of the customers it varies
according to different person to person. So as per the survey 33 people out of 55 i.e.
60% feels that their safety will be at risk, 16 people i.e.29% are not sure about it, and
the rest 6 people i.e. 11% approx. are strongly disagree or disagree.

• I may have accidents if I feel that someone is closely watching me. This question talk
about that the customer may feel distracted due to privacy issue and the information
shared by the customer to the insurance company. And it could lead to accident and
other mis happening at nay time while driving the vehicle. So as per the survey data
31 people i.e. 56% are strongly agree or agree that it might cause accident whereas 14
people i.e.15% are not sure about it and the rest 10 people i.e. 18% ae strongly
disagree or disagree.

❖ Perceived privacy risk. In this according to the data people are hesitating to share
their personal information regarding the travel because it can cause various
problems for them however it just an assumption but it can affect the overall
policy because if customer think or feel that his privacy is at risk the customers
will immediately back out.
 (PV) Perceived value
(Perceived value is the level of satisfaction that a customer receives after spending the money
on certain good or service same in the case of insurance policy everyone wants to get more
than they spend so a rational customer tries to see whether he gets more than he/she invests
or less then or in what amount or quantity so that he can make a buying decision.)
• I feel that usage-based pricing will offer more value for my money.
• The benefits of usage-based pricing exceed the expenditure for availing insurance.
• I believe that the usage-based pricing policy will properly reward my efforts aimed at
limiting my usage of the vehicle.

Analysis:
• I feel that usage-based pricing will offer more value for my money. It is the perception of
the customer that he/she is receiving more value of money than the investment, it can also
base upon the calculation it can be bit complex but it also gives a value in term of number
whether it is good or not. According to the survey it depicts that the 35 people i.e.64%
approx. are strongly agree or agree, 16 people i.e. 29% are not sure about it and last but
not least 4 people i.e.7% are strongly disagree or disagree.
• The benefits of usage-based pricing exceed the expenditure for availing insurance. This
question indicates towards the benefits that the customer is going to receive in exchange
of money he pays. Its quite reasonable if a person is getting more benefits than the
expenditure, he/she more likely to invest in that. According to the survey figures 31
people i.e.56% are strongly agree or agree. Whereas 20 people i.e. 35% are note sure
about that. Only 4 people i.e.7% are either strongly disagree or disagree.

• I believe that the usage-based pricing policy will properly reward my efforts aimed at
limiting my usage of the vehicle. This question is to check the perception and the
decision related to what they believe what they are getting out of this usage based
premium policy. Every rational customer wants a reward for the effort so if he tries to
reduce the usage of its vehicle so that it will provide him certain rewards and benefits. So
as per the data we collected out of 55 people 30 people i.e. 54% are strongly agree or
agree which is more than half. 23 people i.e. 41% are still note sure about it and there is
only 2 people i.e. 3% who is either strongly disagree or disagree.

❖ Perceived value in this section as per the data people believe that they are getting
much more than they pay so it can be beneficial for them in various aspects. This
usage-based method helps them to save more even though it feels little bit
complex due to procedures and other market related factor but it proven to be
more flexible and customer centric.

(AI) Acceptance intention

(Acceptance intension shows that if the people who get to know about this usage-
based vehicle insurance policy worth it or not. So that insurance company can launch this into
the market and the policy should satisfy the needs of customer as well meanwhile it must be better
than existing polies to take their place.)
• I feel the concept is relevant and worth trying
• I feel such innovations are the need of the hour to satisfy low usage customers.
• I feel usage-based pricing is better than existing premium rating methods.
Analysis:
• I feel the concept is relevant and worth trying. After getting all the information by the
customer its pros and cons its benefits what is the decision taken by the customer is, they
are in the favor of the policy or they think its like all other existing policy in the market
so there is no use for this it only brings complexity. As per survey indicated 36 people
i.e.65% are in the favor of strongly agree or agree which is more than half .15 people i.e.
27% are still not sure it’s because of they may not able to understand it properly or due to
some other reason and meanwhile there are only 4 people i.e. 7% who strongly disagree
or disagree.
• I feel such innovations are the need of the hour to satisfy low usage customers. What
people think of this new innovation in the market is it satisfy all the customer need or not
and give them other benefits and opportunity to adjust the policy as per there need. And
the customer who have low usage will get benefit or not because currently there is no
such policy as this. According to the survey out of 55 people 37 people i.e.67% are
strongly agree or agree its more than 50% which shows that people find it innovative
whereas 13 people i.e. 23% are still not sure about it and the remaining 5 people 9% are
strongly disagree or disagree.

• I feel usage-based pricing is better than existing premium rating methods. the question is
all about comparing the existing policy in the market whit the new usage-based insurance
policy in terms of premium chare by both of them and the perception of the customer
what they think which one is better and provides more benefits to them overall. So as per
the numbers we have 35 people out of 55 i.e.63% are strongly agree or agree that its
better than existing premium method 13 people i.e.23% are still not sure about it whether
its good or not and 6 people i.e. 10% are strongly disagree or disagree.

❖ Acceptance intention. people think it is more innovative and better than the
existing premium rate method, they are curious to know more and find it worthy
of investment as it providing them more benefits in various different angle
 SUMMARY AND FINDINGS

In this study there are many significant observations from the analysis are:

• Acceptance intensions of the customers are significantly linked with other

dimensions of the survey i.e. perceived individual benefits, perceives value on
acceptance, easiness in understanding policy terms and conditions.

• Acceptance intension are not influenced by the social benefits however the
respondents are willing to know but there is no base to state that social benefit can
affect the customer acceptance intension.

• Privacy risk is one of the vital factors that can influence this whole usage-based
insurance policy, the main reason is the information disclosing by the customer
due to lack of faith and trust and some personal factors.

• As per the survey data more than half respondent believe that usage-based
insurance policy is more reasonable to charge premium rate and the rest are either
not sure about it or stick with the traditional motor insurance policy.

• All the indicators which is used to measure the various construct in the study were
found relevant to the topic.

• It was found that apart from usage-based vehicle insurance the premium rate
according to the usage there are many other factors which needs to be consider
while deciding the premium and the consideration of other factors (value of
vehicle, location, past driving history) is vital for calculation and terms and
conditions.

• According to the data collected for the research shows that the people find it
innovative and worth trying.
 SUGGESTIONS

1. Mobile based application: There should be use of mobile based application

because now a day’s people are getting more tech savvy so it will attract the
greater number of customers towards this usage-based insurance policy. It can be
use for calculation of premium or the current rate or to change current premium
just by using app rather than to meet agent it will save time effort and the money
of both the parties.

2. Privacy policy : As we can observe the people are more sensitive towards their
privacy and don’t want reveal sensitive information to anyone even with the
insurance company it can be one of the biggest challenge for the insurance
company how they will convince the customer, there should be a separate data
base for storing the information collected from the customers and it should not be
shared with anyone without the permission of the customers. And if anyone wants
to get the access without letting know the customer for that there should be some
alert to notify the company and the customer so that the corrective action can be
taken.

3. terms and conditions: As per the data collected from the people who volunteer for
the survey of usage based insurance policy more than 50% wants that the terms
and conditions should be clear and ease to understand for that insurance company
can opt for categorization of insurance policy to make it more clear in this there
will be some standards and sub-standard’s so that a consumer can see in which
category he/she lies and check the terms and conditions as per that category
otherwise it will be difficult to assess all the information at ones by customer it
also time and energy saving .

4. monitoring and data collection method: One of the crucial points of this whole
survey that how the company is going to collect the data from the customer
without making any interference in their private life or to keep bugging them for
the sake of information. For this the insurance company can go for GPS system
which is now pre-installed in the most of the new cars but it can be limited due to
various factors in that case there should be a separate device which will be
installed by the insurance company it will bring more innovation and the
reliability in the data which is being collected.

5. More flexibility: For the improvement of this usage-based insurance policy the
more flexibility is required. Flexible in terms of premium rates its not only based
upon the usage it should be based upon the customer personal factor such as age,
behavior, driving pattern and the discount also be given to those who seems to be
safer and more reliable for the insurance company. It would help to increase
customer relation with the customer and other will may also try to get discount so
they may change a little to take benefit of insurance policy.
 CONCLUSION

A pre-launch exploration of customer acceptance of usage-based vehicle insurance policy. As the

insurance market is growing there is a need to bring more innovation to the insurance sector as
well to attract more and more people to buy insurance policy. The insurance company needs to
adapt the changes from the global sources and try to generate solution for new problems and try
to find new insight and possibilities so that they can connect with the customer and full fill their
needs and reach their expectations without any delay or hindrance and for that the key focus
should be on the resources available, customers, and their needs. If we observe the report
carefully, we can clearly see that the customers are willing to invest in the insurance policy and
they curious to know the things which will enhance their standard of living and provide them
safety and security. The main problem is with the complexity and the lengthy terms and
conditions of the existing policy the customers wants its clearer and less complex which is easier
to understand and implement. These are the few things which might help to improve the new
insurance policy which is set to launch in in the market. There is a big question mark on how
they are going to change the current scenario of insurance sector, as we all know for every
problem there can be n number of solutions so the only thing is required is continuous
improvement and innovation.
I like to finish the conclusion with one quote “there is always room for improvement, no matter
how long you’ve been in business”. By: - Oscar De La Hoya
 REFERENCES

➢ https://www.icicilombard.com/insurance-information/travel-
insurance-info/article/the-future-of-car-insurance-digital-predictive-
and-usage-based

➢ https://en.wikipedia.org/wiki/Usage-based_insurance

➢ https://qz.com/230055/car-insurance-companies-want-to-track-your-
every-move-and-youre-going-to-let-them/

➢ https://www.sciencedirect.com/science/article/pii/S096585641730561
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➢ https://docs.google.com/forms/

➢ https://www.ibef.org/industry/insurance-sector-india.aspx

➢ https://www.octotelematics.com/