Telematics captures speeding, sudden braking, acceleration and distracted driving data.
Analysis of 4.5 million trips found driving behaviour has greater influence on risk than demographics.
IRDAI has enabled experimentation through Pay-As-You-Drive and behaviour-linked insurance frameworks.
Motor Insurers to Turn to Behaviour-Linked Plans, Look Beyond Traditional Risks: Report
Zuno’s India Road Safety Report 2026 says usage-based motor insurance can reward safer driving.
Motor Insurers to Turn to Behaviour-Linked Plans, Look Beyond Traditional Risks: Report
Summary
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Behaviour-linked insurance models powered by telematics and real-time driving data are expected to play a bigger role in India's motor insurance market, as insurers increasingly adopt usage-based pricing that rewards safer driving habits, according to a report.
Telematics-enabled insurance uses real-time feedback, personalised risk scores and financial incentives to encourage sustained habit formation and align individual incentives with broader road safety objectives, as per India Road Safety Report 2026 by Zuno General Insurance.
"Insurance can evolve from financing accident-related losses to preventing them. Telematics and risk-based pricing can reward safer driving and enable insurers to play an active role in improving road safety outcomes," the report said.
The report noted that telematics can capture driving behaviour through parameters such as over-speeding, sudden braking, sudden acceleration, distracted driving, time of travel and driving consistency, allowing insurers to identify risk patterns before they result in accidents.
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The report added that the sector regulator Insurance Regulatory and Development Authority of India (IRDAI) has enabled experimentation through sandbox initiatives and frameworks supporting Pay-As-You-Drive and behaviour-linked insurance models.
The report highlighted that driving behaviour, rather than demographic factors, is becoming a key indicator of risk and said that analysis of more than 4.5 million trips across 17 states through Zuno SmartDrive data showed that factors such as speeding, sudden braking, sudden acceleration and distracted driving have a greater influence on driving risk than demographic characteristics.
Globally, insurers using telematics-based programmes have reported improvements in driving behaviour and reductions in accident frequency, with studies indicating accident reductions of 20-40% among actively engaged users of behaviour-linked driving programmes, the report said.