Editorial by Andrew Dart
Welcome to Insurtech Insights. This month’s theme is mobility, or as some call it, mobility as a service (MaaS).
It’s a brave new world of autonomous vehicles and on-demand services coupled with smart city technologies. The aim is to get us from point A to point B in the safest, most green and efficient way possible. It blends the economy and speed of mass transport with the flexibility and comfort we associate with private vehicles. In a world with no private car ownership and no drivers, the foundation of traditional private motor insurance evaporates. All we are left with are huge robotic vehicle fleets where accidents happen rarely.
Key barriers in reaching this future are removing human drivers from the control loop and eliminating our need to own the vehicle. Both present some technical challenges, however, the biggest challenge will be gaining human acceptance of these changes. This could take generations to achieve. Yet the seeds of this new mobility paradigm are beginning to sprout, and forward-thinking insurers are already rolling out next-generation insurance products in anticipation.
Today, insurers are having to deal with vehicles that are sometimes directly driven by a human, but at other times are driven by computer with a human supervisor. Risk factors are changing by the very fact of turning on/off vehicle safety features, all of which can change the premium rate from minute to minute. Similarly, we now see private passenger vehicles turn into commercial taxis with a swipe to the right of a mobile app.
Most innovative insurers are turning to telematics and AI technology to get the data needed to dynamically rate and price risk. They also use this technology to provide seamless cover for rideshare drivers as they morph from private risk to commercial risk and back again.
This month, Rick Huckstep surveys the many ways mobility is changing – from car ownership to car-pooling to ridesharing to community bicycles and scooters. Rick looks at the new ways insurers are solving the insurance needs of individuals in the light of these developments. He interviews personal mobility-on-demand insurance pioneers, Ian Sweeney, the GM of Trov Mobility, and Tomer Kashi, the co-founder and CEO of VOOM. As usual, it’s a fascinating read from Rick and well worth your time.
In our second article this month, KPMG’s Elisha Deol looks at how insurers need to be prepared for the challenge of MaaS. She notes insurers have successfully faced dramatic changes in transportation modes in the past. However, they will need to manage a major shift of premiums from private to commercial motor insurance and an overall reduction in premiums as losses decline by as much as 70% this time around. Nevertheless, she is quite optimistic that insurers can be prepared for this shift, so long as they face key questions around culture, innovation and partnerships.
How private motor insurers must pine for the good old days of make, model, year of manufacture and driver’s age. However, the mobility genie is already out of the bottle and there’s no turning back. It’s now up to the industry to adapt to ensure people and property remain covered using the latest technology available. Let’s face it, if we don’t, someone else will.
As usual, we’ve provided a wide array of articles on mobility (see below) to support our lead articles. Please take advantage of this resource to accelerate your own digital thinking around mobility and motor insurance.
Also, many thanks for engaging with this column and attending our Insurtech Insights webinars. You are what makes this community come alive and we couldn’t carry on without your continuing support.
Yours sincerely & digitally,
TDI Head of Australia and New Zealand