Insurance Companies in the New Mobility Service Market
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Our transportation systems are rapidly changing and developing, as we’re seeing increased demand for more personalised and convenient mobility services. All sectors that make up mobility services; private and public transport operators, IT and leasing companies, and user associations, are challenged to offer new services, and build new partnerships and business models.
Mobility as a Service (MaaS) is a reality, Europe being the frontrunner in the market. Already today many MaaS services and solutions are available in cities around the world thanks to the cooperation of public sector and private companies which facilitates the aggregation of different transport services. However, there is a sector which is not yet fully integrated into the greater MaaS picture, but is of crucial importance for the growth of MaaS in Europe and globally: the insurance sector.
Insurance companies play a central role in the transit user’s life and mobility. How can the insurance sector evolve to fit users’ need for multimodality, while also serving the needs of the service providers? How can insurance products accommodate the multimodality aspect of transit that is distinctive of MaaS?
When talking about advantages of MaaS, flexibility is often the most sought after characteristic for categorizing the success of personalised mobility. The flexibility to change plans last minute is one of the advantages of owning a private car that MaaS is looking to compete with. One solution could be to empower MaaS providers to sell insurance products to end-users, similar to what is available for flights today to allow some additional flexibility through term policies, in case the user would like to reschedule or cancel the trip.
Another possible role for insurance to play in the MaaS ecosystem is related to the multimodal journey, using transit systems. There is currently no comprehensive insurance framework for covering the entirety of a multimodal trip, in the case of an incident. A MaaS journey can consist of a ride with an e-scooter, a tram trip, and ride with a shared car. In this multimodal reality, the status of the traveller varies depending on the mode s/he is using and the respective passenger right scheme. There is no comprehensive framework covering the whole trip in case of an incident. Given the multimodal nature of MaaS, shouldn’t insurance products be developed in a way to cover more than one transport leg and one mode?
In the future mobility ecosystem, this issue could be overcome by providing a comprehensive personal mobility insurance or offer policies through an aggregator, as a part of the MaaS service. In both cases there would be several options. One option would be whether the insurance applies only to the insured person, or also covers the property, liabilities, or financial losses. The insurance can be included or offered as an add-on product to any MaaS offering. Adding an insurance element into MaaS and new mobility service offerings can be part of transit company branding, and could become a differentiator in the market. As MaaS becomes more popular for business mobility use, there will be more demand for widely comprehensive insurance products.
MaaS can create new channels and business opportunities for insurance companies. In the future, the main revenue stream of mobility insurance is expected to be fleet insurance, end-user related insurance (for on-road accidents, property loss and damage, third party and liability, trip cancellation, and delays), and insurance for the workforce. In order to unleash this new potential, the first step is to gain understanding of which products are already covered within the new mobility ecosystem, and which are not. MaaS Alliance is currently working on a gaps analysis to establish a clear picture of what elements in the new mobility ecosystem are covered by existing mandatory or additional insurance schemes. This research will support the insurance sector in designing comprehensive insurance products for different modalities and segments.
Another challenge that insurers will face is risk management in a MaaS environment. When focusing on new mobility services which have shifted from ownership models to rental and usage, insurance companies may need data on the usage and user behaviour to calculate the risk. Traditionally for private cars, the risk assessment is done based on the driver’s behaviour and their driving history. Access to MaaS data can be a challenge as it requires willingness of service providers to share data across the value chain, and transparency with the public with the use and purposes of the data collected.
Embedding insurance into different offers is possible, by proposing it directly to customers as an additional service or integrating insurance with the MaaS offering. Already today, some mobility service providers, such as car rental companies, sell insurance as supplementary services, creating an additional source of revenues for their companies.
There is very clearly a place for insurance companies in the new mobility service market. We need strong cooperation from all parties involved in order to implement pilot projects and share success stories and business practices. We at the MaaS Alliance work as a facilitator and reference point to unleash the full potential of MaaS by gathering public and private sectors from Europe, North America, and Asia-Pacific regions.
These thoughts were the outcome of an experts’ workshop organised in September 2019 by the MaaS Alliance and the US counterpart, MOD Alliance, featuring insurance companies and key players of MaaS and mobility industries. The North American leg of the workshop will be hosted later in the year. Analysis and roadmaps will be discussed further, also addressing the differences of EU and US jurisdictions.
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Stopping mobility is the alternative compared to existing vehicles, or multiply it by changing the means of transport.
Both options generate part of the effective solution.
The 2019-nCoV becomes the first effective solution against local and international mobility, redistributes work to the home office, significantly reduces pollution, re-understands sources of contagion and control of all kinds, changes habits food, solves the basic needs at home and not abroad. -edit mobility as a necessity for the search of transcendental needs, not the other way around, where you go out in search of food, work and education to pay bills thrown into consumption activities within the home, taking out the context of consumerism and then as the basis to solve survival, on the one hand, and an essential factor to achieve peace in the world, because we have contradictorily hunted beyond our borders, forgetting the self-cultivation of vegetables, for example, the self-generation of energy, for on the other hand, and the unhealthy life in human relationships where it competed and predation are sometimes the axis of growth and development, ending with polluted cities and full of immobilized immobilies.
Far from concluding claims for compensation to Mr. Ford, we must stop where we can be grateful to have reached the level of development that we are and take the course towards the destination that opens on the planet.
Imagine all the activity and the possible development of MaaS or the Directorate of Transport of the European Commission if all land transport is changed to a levitation technology, the road budget is really huge only in maintenance that far exceeds the cost of the vehicles it serves … you add: how development and growth can be multiplied if we only stop mobility thanks to the new habits acquired in this global health emergency for two years, the same time and investment of the road budget of Everyone that can be used in the development of levitation technology, also consider the quality of life and health cost savings recovered by improved pollution and the years of planetary life as a species we recover to avoid a global environmental catastrophe. ..
Do you think it’s reasonable?
Growth and development can be unlimited, we just have to break our mental barriers full of habits that limit us and make the decision to go to an unlimited destination.
A hug and my optimism