In recent years, the landscape of motor insurance in India has been undergoing significant transformations, reflecting broader shifts in consumer behaviour, regulatory changes, and technological advancements. Policybazaar, a leading digital insurance marketplace, has compiled comprehensive data highlighting the latest trends shaping this dynamic sector.
Also Read: ‘Insurance for All by 2047’: Govt Plans Amendment Bill In Budget 2024, Here’s What Is Expected
This story delves into the key trends identified by Policybazaar, offering a detailed analysis of the factors driving these changes and what they mean for insurers and policyholders alike.
1. Customer priorities in motor insurance:
- Affordability: 29% of customers consider affordability as their top priority, emphasising the need for cost-effective solutions.
- Brand reputation: 21% of customers prioritise the brand’s reputation, highlighting the importance of trust and reliability.
- Customer service: 19% value excellent customer service, indicating the need for responsive and supportive interactions.
- Coverage features: 16% look for comprehensive coverage features, seeking policies that offer extensive protection.
- Claim Process and settlement: 15% focus on a smooth and efficient claim process, underscoring the need for hassle-free claim handling.
2. Preferred add-ons:
- Roadside assistance: 60% prefer this cover, indicating the importance of emergency support.
- Zero depreciation: 55% opt for this add-on, which offers greater financial protection.
- Engine protector: 20% seek this coverage, particularly beneficial during monsoon seasons.
- Consumables: 20% choose this add-on for covering the cost of consumables.
- Key lock replacement: 18% value this coverage for added security.
- Invoice price cover: 10% prefer this to ensure full reimbursement in case of total loss.
- South (26%) has double the uptake of Tyre Protection cover, compared to India average (13%).
3. Seasonal coverage needs during Monsoon:
- Roadside assistance: 50% seek this coverage to handle emergencies.
- Engine protector: 30% prefer this to protect against water damage.
- Return to invoice price cover: 20% opt for this to ensure full value reimbursement.
4. Popularity of PAYD plans:
More than 1 in 3 customers opt for Pay As You Drive plans (PAYD), while 3 in 4 renew them, indicating a shift towards personalised motor insurance coverage.
Popular distance slabs:
- 5000km: Chosen by 30% of customers
- 7500km: Chosen by 25% of customers
- 10000km: Chosen by 25% of customers
- 2500km: Chosen by 20% of customers
Other Trends
- Additionally, 20% of these customers often opt for top-ups, showing flexibility in their usage needs.
- The interest towards PAYD plans is highest in the South (55%) and lowest in the North (36%).
- Top cities using PAYD plans: Delhi (8%), Bangalore (5%), Mumbai (3%), Pune (2%), Gurgaon (2%)
- The adoption of PAYD plans is highest in the metros as they collectively account for a significant percentage of insured vehicles.
5. Tier-wise distribution of motor insurance customers
- Metros – 40%
- Tier – 2 – 36%
- Tier – 3 – 24%
There has been a significant increase of 13% in online adoption by residents of tier-2 and tier-3 cities which was previously lower. This has been driven by growing insurance awareness and the advancement of digital technology.
