In 2017, the Indian two-wheeler market recorded a sale of 17.7 million units, thus overtaking China (16.8 million units) to become the worlds biggest two-wheeler market as per data provided by the Society of Indian Automobile Manufacturers (SIAM) and the China Association of Automobile Manufacturers. The upward trend in sales has continued into 2018, with final sales figures for the financial year ending 2018 recorded at 20,192,672 units, marking the first time the industry has surpassed the incredible 20-million sales milestone.
Although the growth in the number of two-wheelers spells great news for the automobile industry, it is also being accompanied by an alarming increase in the number of road traffic accidents. The matter gets more complicated as most of the two-wheelers are running on the street uninsured. This means that, meaning if the owner of the vehicle involved in the accident does not have the financial capability or an insurance cover to compensate the victim (in case of a Third party liability), then victims are left completely helpless and in the lurch with nowhere to turn around to. The Indian two-wheeler sector shows no signs of slowing down in growth, reiterating the importance of pushing easy to obtain and affordable digital insurance policies for customers. , to ensure that the safety of our streets is not compromised.
Figure: Two-wheeler sales in India from 2010/11 to 2017/18 (in units)
In 2018 all two-wheeler segments, reported a healthy growth of 18.2% (Scooter) and 13% (Mopeds) for the fourth quarter of the Financial year 2018 (April 2017-March 2018) financial year.
Demand from the rural segment is expected to go up due to a good crop in the kharif season along with the benefits of rural employment guarantee schemes. Similarly, urban demand for two-wheelers is predicted to be reinforced by the pay revision for State Government employees and pensioners as well as stabilised rates of inflation for the upcoming financial year, as per market reports.
Alarmingly rising numbers of road accidents in India
As per data available in January 2018, over 150,000 people are killed in India every year in traffic accidents, which translates to about 400 fatalities in a day, or 17 every hour.
According to a paper written by Sanjay Kumar Singh, a Professor of Economics at the Indian Institute of Management about road traffic accidents, India is the only country which has such a high rate of accidents in the world due to road crashes. Furthermore, commuters on two-wheelers are the most vulnerable as they constituted 34.8% of total persons killed in 2016 due to road accidents.
Additionally, the figure is more concerning as in other developed/developing countries, the situation is improving, while in India the situation continues to worsen. As per Singhs analysis, if the trend of accidents continues, the total number of road traffic deaths in India would increase by 100% between 2013 and 2027, passing the 250,000 death mark by 2025.
Figure: Comparison of International Fatality Rates
Further analysis done by Singh about road accidents in India reveals that the most important factor responsible for accidents is the drivers fault (78% of total accidents) out of which accidents are mostly (55.6%) are caused to due unlawful speeding. Additionally, 5.3% and 6.4% of accidents respectively were caused due to the intake of drugs and alcohol, while overloading of vehicles caused 19.6% of accidents.
In addition to this, a Committee on Road Safety headed by former Supreme Court judge KS Radhakrishnan designed to implement new road safety laws found that over 70% of the private vehicles in the country (mostly two-wheelers) run on the streets with no valid form of insurance. Having uninsured vehicles on the street with such high rates of accidents poses an incredible threat as if the owner of a vehicle, who has the liability to pay compensation to the victim, does not have the financial capability to pay for the same, and is uninsured leaves the victim helpless and completely distraught.
Figure: Causes of Road Accidents in 2013
What is the solution?
One thing remains clear: demand for two-wheelers in India is not slowing down, but with the rise in the number of road traffic accidents and uninsured vehicles, there needs to be a complete overhaul in the road safety process in the country. In the past, countries that have successfully curbed the problem of rising traffic accidents have adopted a holistic integrated systems approach that includes greater emphasis on road user intervention, greater insurance penetration as well as improved vehicle standards.
The role of technology and multisectoral strategic plans in helping achieve the same cannot be emphasized enough here. The need of the hour is to push for improving two wheeler insurance penetration in the country with the help of InsurTech brands such as COCO by DHFL Insurance which provide complete coverage at affordable premium rates starting from Rs. 586, along with add-ons which start as low as 0.50 paise per day. Furthermore, not only is each COCORide (The Two-Wheeler Comprehensive Policy by COCO) policy customised to suit individual customer demands and needs. The recently launched COCORide insurance plan, along with a wide array of pick-and-choose add-ons,
Equipped with the integration of evolved algorithms, technology, and decades worth of cumulative experience, DHFL GIs COCORide with its 12 add-on covers, will allow customers to move away from plain vanilla two-wheeler insurance policies and choose a cover and add-ons based on where they live, whether their vehicle is on a loan, etc. A prime example of this would be the availability of choosing an EMI cover and Outstanding Loan Protector if they have a loan on the vehicle or an Engine Protect add-on that is relevant for a person living in a flood-prone area.
In order to enhance a customers experience while buying the COCORide policy online, the companys AI (Artificial Intelligence) and Machine Learning solutions will provide visitors with hyper-localized and customized suggestions as well as content that is built around each persons profile.
If more and more customers are opting to buy two-wheelers it is imperative to push to make our streets safer by insuring them, and COCO by DHFL General Insurance offers the perfect solution for all two-wheeler customers on the roads.
COCO Home page: https://www.dhflinsurance.com/
COCORide https://www.dhflinsurance.com/motor-insurance/bike/