Embedded Insurance #3 | Transforming the Mobility Ecosystem

Sibylle Fischer
March 16, 2020
Innovation, Startups, Products
With the mobility revolution already underway, our financial services systems must be ready to adapt both to changes in consumer behavior and the rapidly shifting mobility landscape itself.

The embedded mobility ecosystem

In the first two parts of this blog series we explored the potential of the embedded insurance model to reach, connect and protect customers, transforming the distribution paradigm for insurers as they enter segments they’ve never been in before. While in Part 1 we looked at the overall impact for insurers and their customers, in Part 2, we narrowed the focus, looking specifically at changes already taking place within the home ecosystem. Now, in Embedded Insurance Part 3, we’ll examine changes happening inside another rapidly evolving ecosystem – mobility.

The future of mobility

Whether you’re thinking generally about the future of mobility, more specifically about the impact of self-driving vehicles on the automotive insurance industry, or just observing the current demand for connected-car technologies and mobile-based telematics solutions – the changes taking place inside the mobility ecosystem today have created an unquestionable need for new risk coverage products and service models, especially those that can deepen and improve customer relationships. As a result, insurers, mobility service providers and OEMs have been hard at work forging valuable partnerships to reach, connect and protect more customers while simultaneously expanding their ecosystems. For insurers, that has largely meant finding new ways to remain relevant in existing markets and developing novel product offerings and partnerships in emerging ones.

At Baloise we talk about the future of mobility in terms of «the three zeros»: zero emission, zero ownership and zero accident.

Sibylle Fischer, Strategic Venturing & Startup Scouting

On-demand products and platforms

Custom, embedded insurance products and on-demand insurance engines are offering just this kind of value-add for many customers inside the mobility ecosystem. Uber teamed with AXA to build a “Partner Protection” marketplace for Uber drivers operating within Europe. These no-cost insurance products are offered seamlessly to Uber drivers for times when they are both on and off the platform, with products tailored according to the needs and context of the individual driver. Similarly, Uber offers all of its drivers automatic insurance protections which adjust according to driver context. For example, third party liability coverage in amounts that change based on what the driver is doing at the time of the incident ( i.e. for a driver who is waiting for a ride request versus one who is in the middle of a trip with passengers.)

Some insurers are creating a different kind of value for customers, using artificial intelligence (AI) to analyze risk in real-time. Flock’s pay-as-you-fly drone coverage allows insurers to generate quotes and policies on the fly, using real-time risk scoring. The result is insurance coverage that is more flexible, more cost-efficient and more customizable than traditional policies. Trov, the on-demand mobility insurance solutions provider, also leverages real-time data from connected vehicles to evaluate risk and then match it with the right amount of coverage. For one of their partners, the driverless fleet provider, Waymo, that means providing automatic coverage for damaged property, lost items and trip-related medical expenses to all Waymo riders -- included at the point of purchase without any action necessary from customers.

The three zeros

At Baloise we talk about the future of mobility in terms of “the three zeros”: zero emission, zero ownership and zero accident. In order to support and opportunize the mobility revolution already underway, our financial services systems must be ready to adapt not just to changing consumer behavior, but also to the three zeros, or the shifting mobility landscape itself. The insurers, manufacturers and industry disruptors who manage to gain competitive advantage inside this mobility ecosystem will be those who can move quickly, think outside of the box, and build the kind of partnerships that can meet the complex and specific needs of both customer and landscape.

We will continue the embedded insurance conversation next month, with a post that explores opportunities for embedded products in the emerging financial wellness space. Stay tuned!