Insurtech startup Vouch incentivises safe drivers
Singaporean startup Vouch’s “No-claim Rebate (NCR)” feature lets drivers receive up to 15% cashback on their annual premiums if they do not make a claim at the end of their policies. Vouch founder and chief operating officer Chean Yujun said the company partnered with major insurers, NTUC Income, Sompo, and Tokio Marine Insurance Singapore to basically pay safe drivers for not making a claim.
Vouch’s new cashback feature is on top of the insurtech’s No-claim Discount (NCD). The NCR system works by grouping drivers with similar driving profiles together. Vouch, then, sets aside 15% of each driver’s policy for the NCR.
“During the policy period, if any member makes an own-damage claim, part of this claim is deducted from the rebate pool, and the remainder of the pool is split amongst the members at the end of their respective policy period,” explained Yujun.“if the pool runs out, there is no negative impact to customers, as everyone is still covered by their respective insurance company. If the group stays accident-free, everyone receives 15% cashback on their premium,” he added.
Vouch also allows drivers to form private “communities” with friends and family or other safe drivers to maximise their cashbacks. “This breakthrough is possible because our insurers have committed to return part of their profits in the event that claims by drivers are low. As such, the NCR cashback feature not only promotes a safe driving culture, but it is also a fairer insurance experience,” he said.
Safe driving culture
Vouch aims to disrupt the insurance industry by giving safe drivers a choice on how they influence their premiums. Aside from being entirely digital, the insurtech firm rewards drivers who contribute to a safe driving culture in Singapore. Yujun lamented that new car owners are “penalised” into paying high premiums even when they demonstrate safe driving skills.
“Whilst car insurance is mandatory, only 15% of drivers make claims annually. That meant that many safe drivers were paying higher premiums in order to cover the risks of less-safe drivers. This came across as unfair and inefficient,” he explained. The Vouch COO said he was surprised insurers were quick to latch on to their NCR idea. “We had positive response from them across all levels. I think that’s because people in the industry are consumers as well, and they have seen how things have changed so quickly in various sectors,” he said.