As the global mobility sector undergoes transformation, so will the insurance industry. With the ever evolving of autonomous cars and electric vehicles, insurance claims are anticipated to drop in the coming years, but when accidents do occur, the stakes will be higher due to the increased costs of replacing advanced components like sensors and electric vehicle batteries. Privately owned cars are expected to lose popularity to fleet businesses and micromobility, impacting the traditional core of motor insurers.
To thrive in this evolving landscape, insurance companies must adopt innovative approaches to compensate for the decline in car insurance premiums and adjust to a shift in risk portfolios. Adapting to potential liability transfers from drivers to manufacturers requires a fresh approach in product development, actuarial skills, and customer service.
Opportunities and challenges in the changing landscape
There exists opportunities for nimble providers who embrace this change. Based on estimates from experts, vehicle connectivity alone could contribute $30 billion to $50 billion to the global mobility insurance industry by 2030.
So what are examples of the new data-driven approaches that companies can use to seize the potential of changes in the mobility sector:
- Behavior-Based Product Pricing: Tailoring premiums to driving style or vehicle use provides policyholders with attractive savings opportunities. Leveraging movement and vehicle data can open doors for additional offers in the long term and accurate pricing for the policyholder.
- New Ecosystem Offerings: Building partnerships with car manufacturers in the growing direct sales market is crucial. Insurers can create beneficial partnerships by integrating insurance seamlessly into the vehicle purchasing process, offering a simplified insurance package as an addon to the sale of the vehicle.
- Multimodal Insurance Products: Responding to the diversity in mobility with comprehensive insurance solutions, providers can offer a single product class covering everything from private cars, rented cars to rented e-scooters, reaching new customer groups.
- On-Demand Services: Statistics show that after acquiring a vehicle, 39 percent of all buyers express a desire to activate supplementary digital services. Specifically, when it comes to owners of premium brand vehicles, this inclination rises to 50 percent opting for such additional services. Insurers can capitalize on this substantial demand by seamlessly providing extended services, such as international insurance, passenger insurance, or active driver coaching, with just a simple push of a button.
Expanding the horizons
Insurers can leverage insights from mobility insurance solutions to further explore new business opportunities. This includes venturing into fleet management, buying and selling used cars, entering the EV charging market, and exploring car servicing sectors. Diversification offers advantages over aggregators through increased flexibility.
Courage and creativity Motor insurers need courage and creativity to navigate this change successfully. Companies that start addressing some of these challenges early on will not only weather the transportation transformation but also play a pivotal role in shaping the new era of mobility.
