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Consumers & DriversSocial Impact & Safety

Grab and AXA Launch First Usage-Based Insurance for Private-Hire Car Drivers

  • The AXA Pay-As-You-Grab policy is the first-of-its-kind in Southeast Asia  
  • Drivers save on insurance premiums by paying per kilometre

Singapore, 11 May 2016 – Grab and AXA Insurance Singapore today announced the launch of Southeast Asia’s first usage-based commercial motor insurance for private-hire car drivers. The AXA Pay-As-You-Grab (AXA PAYG) policy enables drivers to pay insurance premiums calculated on a ‘per kilometre’ basis, saving up to 30 per cent off commercial auto insurance base premiums. Launching first in Singapore, the regional partnership between Grab and AXA aims to have AXA PAYG to roll out to five other countries with Grab services in the near future.

“Pay as You Grab”

  • Flexible Usage-Based Insurance

AXA PAYG is a tailored insurance solution that caters to the need for flexibility by private-hire car drivers who drive part-time to pick up passengers. Drivers have the flexibility to pay insurance in 12 months instalments.

This is the latest step to promote comprehensive safety and insurance coverage, after the launch of Grab’s free Personal Accident Insurance (PAI) for its drivers and passengers under Grab service.

  • Insurance coverage

AXA PAYG will provide coverage for third party liability (including passengers) such as injury or death of a third party. AXA PAYG also covers third party property damage.

  • Up to 30% Premium Savings

Traditionally, private-hire car drivers are charged a fixed annual premium at one go, regardless of whether vehicles are driven for personal or Grab use. AXA PAYG drivers pay a flat rate of 70 percent of the base premium, and an additional S$0.06 per km driven on Grab rides, capping off at 100 per cent of their base premium. This means they will never pay more than their traditional commercial auto insurance premiums – drivers essentially only pay as they Grab.

AXA-PAYG Fig 1

AXA PAYG Premiums in a Nutshell: Drivers pay a flat rate of 70 per cent of base premium and S$0.06 for every kilometre driven on Grab rides.

“There is no price tag to safety. With over 40 per cent of our GrabCar drivers driving less than 10 hours weekly, this is a growing segment which needs flexible safety solutions and help to manage their operational costs. AXA PAYG is a first in the Southeast Asian ride-hailing industry, and will supplement our existing free Personal Accident Insurance to give our drivers and passengers the peace of mind that they are comprehensively covered,” shared Mr. Lim Kell Jay, Head of Grab Singapore. “AXA PAYG will reduce cost barriers to entry for new PHV drivers and help to grow the supply pool to meet Singaporean commuters’ demand. This is part of Grab’s commitment to helping our drivers maintain sustainable livelihoods by managing operational costs such as insurance, rental, fuel and mobile data plans. With global insurer partner AXA, we’re planning to offer this to GrabCar drivers in all the markets Grab operates.”

Adds CEO of AXA Insurance Singapore, Mrs. Doina Palici-Chehab, “We are proud to be the first insurer in Singapore to offer usage-based insurance pricing. Recognising the growth and demand for part-time drivers, we identified that one key barrier for drivers, especially part-time drivers, is the regular fixed insurance premium model. With flexi driving hours, paying a fixed insurance premium does not make economic sense for them. This new pricing model will allow both drivers and passengers to enjoy savings and a better peace of mind when they are on the road. As a leader in motor insurance in Singapore, AXA aims to move from fixed insurance pricing to per-KM pricing (Pay as You Go) to more behavioural pricing (Pay as You Drive) in the future. We are confident AXA PAYG will support Grab’s ambition to ‘Drive Southeast Asia forward’ and will continue developing innovative insurance solutions to meet the practical needs of our customers.”

AXA PAYG Fig 2

Estimated cost savings for a 40 year-old PHV driver who drives less than 10 hours weekly.

The Future of Safety in Ride-Hailing: Telematics

Grab and AXA’s partnership will not stop with PAI and AXA PAYG. The next step is to leverage anonymised driving data such as distance, speed, braking and driving patterns, to mine insights into driving patterns and develop ways to incentivise safe driving habits on the road.

  • Improving Road Safety

In the near future, Grab and AXA plan to monitor and assess anonymised telematics data from Grab drivers to better understand driving speeds and patterns – these can include the average speed and distance travelled, the most traffic-congested days of the week or lull time belts throughout the day. Such insights will be useful for drivers to help them plan their routes, or for Grab to incentivise safe driving behaviours and safer roads in Singapore.

Singaporeans can be safer drivers. A 2015 road safety survey conducted by AXA showed that drivers are unaware of dangerous driving habits, with 63 per cent of respondents (a 7 per cent increase from 2014) admitting to speeding, while 52 per cent perceived speeding as not dangerous.

A recent example and first foray into using telematics to enhance road safety is Grab’s recent trial test of an initiative to warn GrabBike drivers who speed in Jakarta. The speed of a group of GrabBike drivers was monitored and reminders to slow down were issued, resulting in a 35 per cent reduction of speeding in the following days.

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