From the arrival of flexible vehicle subscriptions to the disruption of traditionally ‘safe’ investment sectors, such as automotive, the future of mobility is set to have a significant impact on the insurance and asset management sectors.
Click on each of the sections below to understand how emerging mobility trends could impact the insurance and asset sectors in the near, medium and long-term future.
Growth in telematics and usage-based motor policies: The increase of 'black box' or telematics policies that use Connected & Autonomous Vehicle (CAV) sensor data is expected to enable greater feedback on quality of driving, and safety behind the wheel.
This will drive more accurate (and cheaper) pricing for safer drivers and potentially improve the behaviour of unsafe drivers through feedback. In addition, policies could also be scaled according to the mileage or road use to accurately reflect the driver's use.
Bundling of insurance with vehicle leasing: The arrival of flexible vehicle 'subscriptions' and personal contract hire could increasingly allow motor insurance to be bundled with the lease of the vehicle itself. This would be more convenient for drivers.
Insurance industry input into regulation governing Autonomous Vehicle (AV) incident liability: Across many countries, insurance companies are working with Governments and trade bodies to determine how AVs (and vehicles that can switch between autonomous modes) are treated in law.
In the UK some clarity has been made through the Automated and Electric Vehicles act which grants insurers the right to recover costs relating to an incident with an AV.
Reduced motor accident impact on life expectancy and health insurance: In the future, AVs could reduce the volume of road accident injuries and fatalities thanks to improved safety and enhanced capabilities. This could reduce the overall mortality rate of the population as well as claims relating to motor injuries, influencing the pricing of health and life insurance premiums.
Transition from personal liability insurance to product liability for motor vehicles: As AVs and software increasingly make driving decisions instead of humans, in the future we may move from personal motor insurance products sold on an individual basis to product liability sold to manufacturers and operators. Coupled with a vast reduction in accident rates, this could eliminate the need for personal motor insurance.
Traditional 'safe' investment sectors disrupted by mobility transition impacts: Mobility-related disruption will impact a wide range of sectors beyond automotive. As some of these changes take root, we expect disruptions - such as AV logistics, changes in vehicle usage patterns, city landscapes - to impact traditionally safe investment areas such as real estate and infrastructure.
CAV sensors streamline the claims process: An increase in sensors and cameras available on CAVs could increase the certainty of future claims - providing widespread independent evidence for incidents. With sufficient external data available, there is a possibility that the majority of claims could be automated in the future.
Non-AVs become too expensive to insure: When the majority of vehicles on the roads are AVs, will traditional motor insurance become a product offered only to enthusiasts who continue to drive motor vehicles for sport and leisure? With a comparatively higher risk and smaller scale, these products could well be more expensive than today. In the long-term UK regulation may even ban non-AVs as a public health concern.
Vehicle health sensors to input into health premiums: Health sensors in vehicles, where individuals may spend a significant period of time, could be linked to a broader array of wearables, health apps and monitoring devices that could contribute valuable information to an individual about their health. There are also opportunities to offer health insurance products that are either priced according to user lifestyle or incentives to policy holders to make positive lifestyle changes based upon this data.