![Insurers eye windfall from proposed satellite-based toll collection system](https://cdn.magzter.com/1547192204/1719600564/articles/wt6HVt4zvv4xrVY8REKsys/INSURERS-EYE-WINDFALL-FROM-PROPOSED-SATELLITEBASED-TOLL-COLLECTION-SYSTEM.jpg)
The National Highways Authority of India's (NHAI) plan to switch to satellite-based toll collection system will not just eliminate the physical toll booths and the road congestion, but will also offer a significant opportunity to insurance companies to customise motor vehicle insurance based on real-time location data, according to insurers.
On Tuesday, the NHAI conducted a workshop on Global Navigation Satellite System (GNSS), for which it had floated tenders earlier this month.
According to preliminary deliberations in the run-up to the workshop, the authority plans to amend central motor vehicle rules to make fitting of an onboard unit (OBU) - a 24/7 location tracking device mandatory. This OBU will be seamlessly integrated with the FASTag payment mechanism, allowing for toll deduction without a booth. This unit will collect location data every 5 seconds, and transmit it through every 60 seconds.
Road to monetisation
Anurag Jain, union road transport and highways secretary, said that location data of users can be eventually monetised. According to insurers, motor insurance has largely been priced based on the assets.
The price is usually based on the make and model of the car and premiums are charged uniformly even though claims frequency varies.
"GNSS can be a game-changer for the insurance industry. Today we use a lot of proxies. For example, we ask the customer to give a photograph of their odometer and then we decide how many kilometres a vehicle has been driven. We also capture the data on the basis of service records. A lot of manufacturers come with connected cars and we got a lot of information from that," Rohit Daga - Business Head (Motor Insurance) at ICICI Lombard, said at NHAI's workshop on GNSS.
Denne historien er fra June 29, 2024-utgaven av Business Standard.
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Denne historien er fra June 29, 2024-utgaven av Business Standard.
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