BKI to apply telematics to cut risk from young drivers, fleet trucks
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Bangkok Insurance is adopting telematics to cut its motor-insurance losses from risky segments such as young drivers and commercial fleets, especially as trucking becomes more important under the Asean Economic Community (AEC).
Telematics is the use of telecommunication and other technologies to track driver behaviour, including speed, as well as their location and other useful information. The hope is that it will promote safe driving, and therefore fewer insurance claims.
BKI will be the first Thai insurer to make use of telematics by joining with Scope Technologies, a global provider. Panus Thiravanitkul, president of BKI, said the technology was expected to launch in April. In the beginning, it will be offered for young drivers, who are regarded as a high-risk segment.
Commercial truck fleets are also considered high-risk clients, and therefore the company has not pursued this category much. However, it believes telematics will lower risk, and so it wants to increase its focus on this segment as the Asean economic integration approaches, he said. After the AEC is fully effective, Thailand will be a hub of road transport.
While individual motor-insurance clients account for 42 per cent of BKI’s premium income, truck fleets contribute only a small proportion currently.
Telematics is well known in Europe, while in Asia, Japan has also adopted this technology.
The addition of this technology will not cost BKI’s clients anything. The firm will absorb the cost as it wants to educate the market on its value.
Panus said that in the first phase, the company targeted only 10,000 telematics units, mostly in commercial fleets. But once the technology is in general use among individual customers, BKI hopes to slash the loss ratio from underwriting motor insurance by 10-15 percentage points from the current level of above 60 per cent.
BKI expects premium income in 2015 to grow by 12 per cent, compared with just 4.4 per cent expected this year, because of such positive factors as government projects and improved auto sales and mortgage lending.
The firm has cut this year’s growth estimate to 4.4 per cent from the targeted 5 per cent because of the plunge in auto sales and the slow recovery of the economy.
“We expect total premium income of Bt16.36 billion this year, less than the target of Bt16.70 billion. Next year, we aim for Bt18.2 billion,” Panus said.
When the economy starts growing again, price wars will resume as well, he added.
