The Key Factors to Promote the Pay-As-You-Drive Insurance in Taiwan

Large insurance companies are moving toward the use of advanced technologies such as telematics to develop fair and transparent pay-as-you-drive (PAYD) automobile insurance. The opinions of expert service providers are essential and valuable to these insurers, helping them avoid or control any risks associated with entering a new market. Therefore, this study explores the critical factors involved in introducing and promoting the PAYD insurance system in Taiwan. We consider the telematics business ecosystem of Taiwan’s vehicle insurance market to construct partnerships that support managerial suggestions for promoting PAYD insurance in Taiwan. Relevant data are extracted from automobile insurance and telematics literature and from interviews with experts in the telematics and insurance industries in Taiwan to understand their perspectives. We present 15 key factors required for introducing PAYD in Taiwan and several managerial suggestions. Results reveal that the car dealership industry is the most likely leader of the PAYD insurance market in Taiwan and that telematics companies are niche players involved in promotional efforts. According to this study’s findings, the business ecosystem of PAYD insurance in Taiwan requires new system integrators. Telematics services can be integrated into the Omni-Channel model and yield additional value to customers and service providers.