Insurance risks burning platform if it fails to evolve

As risk managers arrive in Brighton for the AIRMIC conference, broker Marsh has warned insurance coverage will need to radically change to reflect the now mobility in the global workforce.

The broker has warned that unless the market evolves to mirror these changes it may finds itself “on a burning platform” which may also hinder the development of the accelerating changes in the global sharing economy and mobility sector.

Published today report, Mobility in a post-pandemic world: From evolution to revolution, analyses the global trends shaping the way societies around the world will move, share — and trust — over the next 12-18 months. It concluded new forms of insurance, including programs to support gig-workers at scale, will need to be created.

The COVID-19 pandemic is reshaping mobility patterns and the sharing economy around the world, it added. 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.

“But if insurance, which plays a key role in the trust dynamic, doesn’t evolve alongside these changes, progress could be hindered,” it warned.

According to the report several trends are creating opportunities for this insurance evolution, including supporting gig-workers at scale. While the concepts of self-employment and independent contractors are not new, digital companies providing wheel-based services have accelerated access to this type of 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 digitised payments can lead to digitised risk, so too can digitised income lead to a form of distributed portable benefits supported through a combination of public programs and private industry, Marsh said. #

“It is remarkable how the pandemic has accelerated adoption of new mobility habits around the world,” said James Rose, Head of Marsh’s US Sharing Economy and Mobility Centre 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.”

Opportunity also exists with advanced sensor technology that can track human driving behaviour, the report said. A number of Original Equipment Manufacturers (OEMs) are investing in their own early stage in-house insurance companies, capitalising 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 behaviour based on the data they collect, traditional insurers may find themselves “on a burning platform, with an acute need to evolve,” the report explained.

“The increased use of digital payments for various modes of transport, from e-scooters to public transportation to car share rides, also will also lead to the creation of innovative insurance solutions,” Marsh concluded. “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.”

As risk managers arrive in Brighton for the AIRMIC annual conference, broker Marsh has warned insurance coverage will need to radically change to reflect the now mobility in the global workforce.

The broker has warned that unless the market evolves to mirror these changes it may finds itself “on a burning platform” which may also hinder the development of the accelerating changes in the global sharing economy and mobility sector.

Published today report, Mobility in a post-pandemic world: From evolution to revolution, analyses the global trends shaping the way societies around the world will move, share — and trust — over the next 12-18 months. It concluded new forms of insurance, including programs to support gig-workers at scale, will need to be created.

The COVID-19 pandemic is reshaping mobility patterns and the sharing economy around the world, it added. 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.

“But if insurance, which plays a key role in the trust dynamic, doesn’t evolve alongside these changes, progress could be hindered,” it warned.

According to the report several trends are creating opportunities for this insurance evolution, including supporting gig-workers at scale. While the concepts of self-employment and independent contractors are not new, digital companies providing wheel-based services have accelerated access to this type of 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 digitised payments can lead to digitised risk, so too can digitised income lead to a form of distributed portable benefits supported through a combination of public programs and private industry, Marsh said. #

“It is remarkable how the pandemic has accelerated adoption of new mobility habits around the world,” said James Rose, Head of Marsh’s US Sharing Economy and Mobility Centre 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.”

Opportunity also exists with advanced sensor technology that can track human driving behaviour, the report said. A number of Original Equipment Manufacturers (OEMs) are investing in their own early stage in-house insurance companies, capitalising 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 behaviour based on the data they collect, traditional insurers may find themselves “on a burning platform, with an acute need to evolve,” the report explained.

“The increased use of digital payments for various modes of transport, from e-scooters to public transportation to car share rides, also will also lead to the creation of innovative insurance solutions,” Marsh concluded. “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.”

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