nuride - What a fascinating concept!

nuride is a US online community that has already built up a base of 40,000 members. The premise of the community is that you register, and then record trips you have saved by either car pooling, taking public transport, riding your bicycle or even telecommuting. For each trip you score reward points, which you can redeem for discount vouchers, tickets to shows, etc. 

The practical use of the site is to connect to other people that have the same commuting needs as you, and car pooling with them. It looks like it is a particularly useful tool for large employers with many staff in one place. So you go onto the site and say you are traveling to say Swiss Re's offices. You link up with someone in your suburb that also travels to the same place that you did not know of. So obvious.

The reward benefits are sponsored by companies. I assume they do that either for getting feet through the door or out of a concern for the environment.

The cool thing about the site though is the connection to other commuters for car pooling purposes.

I hope their members know about Pay As You Drive insurance....

Coverbox discussion

There is a blog entry on Smart421 that discusses Coverbox and the implications for commoditization through Coverbox. It is a good perspective and a worthwhile read.

The blog posting is here.

Pay As You Drive in India

Three insurance companies are talking about launching Pay As You Drive in India. As with all things in India, there are a large number of cars. There are also massive insurance companies, most of them previously owned by the government. In the article below it describes what two of the companies are talking about doing. HDFC ERGO talks about a product similar to the Real Insurance product, but with a device monitoring mileage. ICICI Lombard points to a product more similar to the "paused" Norwich Union product. 

Source:

Motor cover convertibles on the way
Customers opting for this usage-based insurance will be asked to shell out an advance premium and indicate the number of kilometres they were likely to drive during the period of the cover, usually one year.


Have you felt cheated about the thousands of rupees you forked out as motor insurance for your car all these years when it barely stirred out of the driveway? Have you been frustrated by the one-size-fit-all nature of most motor insurance products, but had little choice other than put up with it?

That may be about to change, as rising competition forces insurance companies to try and distinguish their policies from those offered by rivals. Usage-based insurance is all set to debut in the Indian motor insurance market soon, as the country joins developed nations such as the United States, Europe and Japan in introducing what can be simply put as pay-as-you-drive (PAYD) insurance.

As the name suggests, the way this insurance product will work is simple; much like a pay-as-you-go or pre-paid mobile connection.

Customers opting for this usage-based insurance will be asked to shell out an advance premium and indicate the number of kilometres they were likely to drive during the period of the cover, usually one year. Once the originally-indicated distance is travelled, customers will have the option of topping it up further, and if the distance is less, the customer is refunded the extra payment.

“We are working on a number of add-on covers, including PAYD,” Ritesh Kumar, MD & CEO of HDFC ERGO General Insurance, told ET.

Add-ons are additional insurance that can be bought for a little extra premium on the basic premium.

For PAYD to work, the insurance company will ask customers to pay a premium based on the distance they are likely to drive during the year and install a small black box type of gadget inside the insured vehicle which will track the distance actually travelled.

“After a year, the individual will be either asked to pay an additional premium if he has driven more or we may refund him the extra premium if he has driven less. However, if there is an accident during the cover period, the insurer will pay the sum assured for repairs,” said Richard Wulff, HDFC ERGO chief underwriting officer.

HDFC ERGO is not alone in thinking about such a product. General insurers such as ICICI Lombard and Bajaj Allianz are also examining similar policy products.

“We are also evaluating the product which is very popular in the US. Under this system, every car will have a global positioning radio system that will send data, including average speed, the types of roads on which it runs and the driving pattern. The premium will be based on all these parameters,” said N Eswaranatarajan, head of motor insurance at ICICI Lombard.

A PAYD system has mixed success globally. While Mr Eswaranatarajan pointed to the policy's popularity in the US, Britain's biggest insurer Norwich Union dropped the policy last year after tepid response from customers.

Customers who joined had a gadget fitted inside their cars which constantly fed back data on where and when they were driving using satellite technology. This was found too intrusive by some customers.

Insurance industry officials in India said while legal decks were also cleared for insurance companies to launch such policies in India, there remained significant roadblocks, not least the effective monitoring of the mileage the vehicle has driven.

“There are two typical problems - our market, which is not very mature, may have issues with checking the mileage the vehicle has done initially when the product is sold and the subsequent monitoring. Additionally, prices for some makes of popular car models are already low. We are trying to work our way out of these problems,” said Vijay Kumar, head of motor insurance at Bajaj Allianz General Insurance. “We are deliberating on the PAYD policy,” he added.