KOBA, which Insurance Business recently recognised as one of the top 10 insurtech leaders in Australia, has finally launched its pay-per-kilometre (pay-per-km) car insurance.
The new comprehensive car insurance allows customers to pay an upfront cost to cover their vehicle while parked and only a few cents per kilometre as they drive.
The insurtech start-up facilitates its new pay-per-km model through a KOBA Rider, a small matchbox-sized device attached to the car's OBD port that communicates with the company's smartphone app to automatically calculate driving distances and charges a per-kilometre rate for each trip.
“Our pay-per-km product has been over 12 months in the making, and we're excited to be here at the start-line, offering a very different approach to car insurance to the Australian public; something we believe is a fairer, more transparent approach,” said KOBA founder Andrew Wong.
“Pay-per-km insurance is something that's transformed the car insurance landscape in overseas markets, and we're looking forward to seeing how it will perform here in Australia also.”
Nick Bell, head of insurance + underwriting, added: “As part of your quote, we may charge you $300 to cover your car for the year while it's parked. Then, we may charge you 5¢ per kilometre. Right now, you might only be driving to the supermarket and a picnic once a week; and wind up driving 200km in one month.
“At 5¢ per km, that would be $10 for the month for your driving premium. For the first time, we are putting the customer in control of their premiums. Customers decide how much they pay, if they drive less, they pay less.”
KOBA first announced its plan to launch the first connected pay-by-kilometre car insurance in Australia in April 2021, noting its Software as a Service (SaaS) partnership agreement with By Bits, which offers documentation and APIs and the ability to integrate data and generate insight to support real-time mobile applications for customers.
According to KOBA, the By Bits SaaS includes a rating engine to calculate insurance premiums using modifiable underwriting and rating rules, and it splits the premium into a fixed amount and a per-kilometre amount. It also comes with an integrated policy management system to manage the entire lifecycle of a car insurance policy, from quotation to policy and renewal.
In August 2021, KOBA chose Eric Insurance Limited (eric), a general insurer with over 20 years of experience in the automotive insurance industry, as the underwriter of the pay-per-km car insurance.
eric CEO Malcolm Tilbrook previously commented: “KOBA has a great team, and we have been impressed with them from day one. They have a great balance of experienced insurance veterans and proven start-up talent who have worked directly with the senior leaders at eric. We are throwing our full support behind them and are excited to see what they can produce.”