Edelweiss’ Shanai Ghosh on why it makes sense to SWITCH to usage-based insurance

Edelweiss General Insurance is a digital first Insurer and the company aspires to transform the Insurance business by making it easy, friendly and transparent. Within 3 years of its inception the company has shown significant growth and is one of the fastest growing InsurTechs companies in the country. For FY 22, the company grew 60%, that is 5 times the industry growth. Currently Edelweiss General Insurance has 2 million active customers, which is a noteworthy achievement for a 4-year-old organization. offering simple, yet compelling products backed by a strong customer service to delight their customers.

As a very innovative insurance company Edelweiss General Insurance offers its customers very personalised solutions. The company was the first to introduce India’s only on-demand motor insurance, SWITCH, in 2020 under IRDAI’s Sandbox initiative. With a focussed approach and with the investment climate looking positive they will continue to strengthen their portfolio and will launch more such app based products in this category.

In conversation with Adgully, Shanai Ghosh, Executive Director & CEO, Edelweiss General Insurance, elaborates on usage-based motor insurance and why it is ideal for customers who work in hybrid or WFH environment, the #SwitchToSave digital campaign, and more.

Edelweiss General Insurance was one of the first to introduce usage-based insurance in 2020. How has it been accepted and how have you taken it forward further?

Usually, under a regular motor policy, there is no difference in the premium paid by a customer who hardly used the vehicle when compared to a high usage vehicle owner. Edelweiss General Insurance changed this with the introduction of SWITCH in 2020 under IRDAI’s Sandbox initiative and became the first company to introduce usage-based motor insurance in India.We allowed them to switch on and off their motor insurance when not driving. We found that a lot of customers benefited from this product. The positive response we received from our customers encouraged us to launch an upgraded version of SWITCH in 2022, again under the Sandbox initiative.

SWITCH 2.0 is a mobile telematics-based product and it places complete control in the hands of the customer. It allows customers to save premium depending upon how much and how well they drive.Through SWITCH 2.0, we want to encourage safe and good driving behavior, along with offering savings on premiums.

Recently, the regulator introduced new guidelines permitting general insurance companies to launch tech-enabled concepts for Motor Own Damage (OD) cover.  Our SWITCH Pay-As-You-Drive add-on cover allows customers to get an attractive discount on their Own Damage (OD) premium depending upon their annual usage in terms of distance covered. The premium will be charged according to the kilometers travelled by the car.Drive less, Pay less with this add-on!

IRDAI’s positive move just reinforces our belief in the huge potential that usage-based insurance has in India. We are delighted and proud to be the frontrunners in introducing such innovative concepts to the customers. We continue to strengthen our portfolio and will be launching many more such app-based products in this category.

What are advantages for going for a usage-based insurance and what kind of communication strategy have you formulated to promote this?

We launched #SwitchToSave, a witty and humorous digital campaign, to educate people on how good driving leads to savings on premium. The message is conveyed in a fun and engaging manner. Through our campaign, we want to encourage customers to make the Switch and Save.

We are leveraging all digital mediums effectively for the #SwitchToSave campaign. We have extensively engaged with customers and other stakeholders via Google platforms, Display and Banner ads, Direct publishers, Social media platforms like Instagram, Facebook, Twitter, LinkedIn and YouTube, emailer & SMS with the message Drive less, Pay less; Drive better, Pay less!The entire outreach is being done through simple and quirky short videos, influencer activation and posts, aimed at creating awareness about the product features and encouraging customers to pay only for what they actually use.

Here’s how customers benefit with SWITCH:

• SWITCH allows you to link your premium to usage – so the days you don’t use the car, you can switch off your insurance and save
• SWITCH also encourages good driving and therefore customers can save more through the year. The better you drive, the more you save on your insurance premium
• Policyholders will no longer need to switch on the policy if they use their car, the app will do it for them.
• The app detects motion and automatically activates insurance when the vehicle is driven, making it convenient and hassle free for the customer
• It is Subscription based – Customers can now pay Motor Insurance premiums monthly as per usage.

The usage-based insurance is a new concept that needs to sink in with the Indian audience. What are some of the challenges or roadblock you have to face to make it work in India?

Usage-based insurance is a growing segment with huge potential. The concept will appeal to the value conscious, Indian mindset, where people don't want to pay a rupee more than they have to. This is a new concept and hence adoption will take time. Once people understand the concept, get the convenience, and understand the value, I'm sure there will be adoption.

Customers today want personalised solutions, that offer them better value and empower them with greater control and choice. Pay as you drive addresses this need. People are now beginning to realise that they can save on their insurance premiums based on their usage and driving behaviour. This realisation will gradually drive adoption for these new concepts in India.

I also feel Insurers should explain the product benefits in a very simple and easy to understand manner with overcomplicating the language.  Benefits need to offer simple products that are easy to understand and convenient to use for the customer. An empathetic approach and simple language will help insurers connect and engage better with customers, leading to faster and better adoption of such new concepts that ultimately benefit the customer only.

Who are you targeting for your usage -based insurance policy? Will this bring in some behavioral changes and if so, what are those changes?

Usage-based motor insurance is ideal for customers who work in hybrid or WFH environment, or have company provided transportation, or use public transport for work commute, retired customers, people with multiple cars who use their secondary vehicles sparingly.

SWITCH is for anyone looking for personalised solutions and wanting to be in complete control of what they use and pay for. Also, anyone who wants to renew their motor insurance or buy a new one is a potential customer for us. It would also appeal to people who believe they are good and safe drivers and should, therefore, be paying less than those who are not. Now, SWITCH is an app-based product. So, our wish is to reach out to the 750 million smartphone users in India today and encourage them to Switch.

There is savings in your premium when you opt for the usage-based insurance policy?  What is the kind of savings one makes and how attractive is this for people to shift towards usage-based insurance?

For SWITCH, the premiums are determined using both vehicle and driver details like driver age and driving experience. The premium is charged only on the days the vehicle is used and thus savings are made on days the vehicle isn’t used. The premiums are further discounted basis the driving behaviour the app records and the end discounting can be as high as 50% of per day charge. This is over and above the savings made when you don’t pay on non-driving days.For a good driver, driving 3-4 days in a week, the savings can go upto 60% of their current insurance premium.

We also have SWITCH Pay as you Drive (PAYD) add-on which can be bolted on to regular Motor Insurance policies. With this add-on, we give customers three slab options of Own Damage cover - up to 5000 km; 5000 to 7500 km; 7500-10000 km annually. Based on their annual usage pattern, customers can opt for the slab that best suits their usageand get additional savings in the premium. Customers will be able to save upto 25% on their premium with this add-on.