Insurance incubator Insurtech Gateway Australia has announced plans to introduce a pay-as-you-drive motor product in partnership with a Silicon Valley start-up specialist.
The investment in the motor offering is one of two that the organisation – which is an expansion of the London-based Insurtech Gateway – has made since it launched here a year ago. The other investment focuses on developing a bushfire risk model.
Insurtech Gateway Australia CEO Simon O’Dell says the motor product, which will have a pilot launch on January 1 next year, is a first for Australia.
Calling it Australia’s first “connected” motor insurance offering, premiums are charged according to kilometres travelled that are recorded in real-time through an on-board diagnostics (OBD2) device.
“There’s a distinction between pay-how-you-drive and pay-as-you-drive,” O’Dell said. “Some of them will say you pay for usage but at the start of the year, you basically say this is how many kilometres you drive and you disclose it at the end and you might get retrospectively charged a little differently”.
Connected means you have an OBD2 device connected to your car and that communicates directly with your smartphone and you get data on the kilometres driven. “Australia is yet to introduce a connected pay-as-you-drive model to the market but we think that that it will explode soon and you will see some of the mainstream insurers start to offer that over the next few years.”
He declined to reveal the amount that has been invested in the two ventures but says the pandemic, which has caused widespread business disruption, has also created opportunities for the incubator. “Before the downturn happened, the price, the valuations that you pay are highly inflated so it’s not as favourable,” O’Dell said. “We have definitely seen a few bargains around at the moment and we are wanting to make the most of that. So as far as we’re concerned we’re open for business as usual.”
The incubator is stepping up its growth plans for Australia, expanding its team with the recruitment of several insurance executives to join the business. Former IAG Firemark Ventures Managing General Partner Ron Arnold has joined as Associate Partner while marketing solutions expert Gil Snir has been appointed Tech Innovation Adviser.
The gateway has also unveiled a mentoring panel including Willis Re Researcher and former United Nations Environment Programme Finance Initiative Consultant James Hutchin, Envest Chief Technical Officer Luke Saxby and Insurtech Australia Co-Founder Brenton Charnley.
This article courtesy of insuranceNews. Check out their website at https://www.insurancenews.com.au/.