In­surtech startup Vouch in­cen­tivises safe driv­ers

Singapore Business Review - - STARTUPS -

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.

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