Mobility Sector Will Need New Insurance Products to Continue to Grow: Marsh
For the sharing economy and mobility sectors to continue to grow, they will need new forms of insurance, including programs to support gig-workers at scale, advises a report from insurance broker Marsh.
According to the report, the COVID-19 pandemic is “reshaping mobility patterns and the sharing economy” around the world. From the surge in last-mile delivery to the first driverless delivery service to the gaining popularity of e-scooters, mobility habits will continue to evolve quickly over the next 18 months, Marsh says.
The report, Mobility in a post-pandemic world: From evolution to revolution, analyzes the global trends shaping the way societies will move, share and trust over the next 12-18 months.
The report warns that if insurance, which plays a key role in the trust, doesn’t evolve alongside these changes, progress could be hindered.
“It is remarkable how the pandemic has accelerated adoption of new mobility habits around the world,” said James Rose, head of Marsh’s U.S. Sharing Economy and Mobility Center of Excellence. “What hasn’t changed, however, is the need for society to trust that these modes of transport are safe. Insurance is essentially a ‘promise to pay’ and as such, plays an essential part in the trust dynamic that facilitates permission to operate and protects the platform and the user where responsibility for risks may not be clear. If insurance can keep pace and evolve with this accelerating mobility shift, it can empower growth and possibility in this sector for many years to come.”
The authors see several trends creating opportunities for insurance, including supporting gig-workers at scale. Digital companies providing wheel-based services have accelerated access to independent contractor or gig work and “highlighted the deficiencies in a social safety net to support them” should they be injured on the job and lose income.
“In the same way that digitized payments can lead to digitized risk, so too can digitized income lead to a form of distributed portable benefits supported through a combination of public programs and private industry,” Marsh notes.
Opportunity also exists with advanced sensor technology that can track human driving behavior, the report says. A number of Original Equipment Manufacturers (OEMs) are investing in their own early stage in-house insurance companies, capitalizing on a new crop of sensor-enabled electric vehicle models. With OEMs offering personal auto liability/motor insurance at the point of sale and rewarding insureds with safer driving behavior based on the data they collect, traditional insurers may find themselves “on a burning platform, with an acute need to evolve,” the report states. There should also be products to address the increased use of digital payments for various modes of transport. “The use of data from individual digital journeys can not only drastically improve the claims management process, but also create an opportunity for real-time individualized on-demand insurance,” the authors contend.