If telemetry isn’t the game-changer it was once heralded to be, what other change is coming down the line?
One evident trend is that vehicle ownership is declining as car-sharing and ride-hailing services continue to gain ground. According to a survey by Cox Automotive, 40 per cent of people think that having transportation is necessary, but owning a vehicle is not3. This jumps to 45 per cent for Millennials.
Safety technology in cars is becoming more effective, putting more emphasis on prevention and less on traditional indemnification. This will potentially cause insurance premiums to decrease due to fewer accidents.
Another trend is the rise of semi-autonomous and autonomous vehicles. Though the availability and adoption of autonomous vehicles is still several years away, we will soon have vehicles that are ‘driven’ by an operating system and dependent on a range of sensors, software and algorithms, and that are designed, built and maintained by third-part entities that will require new forms of liability coverage4.
The net effect of the above trends is that car insurers are reimagining the scope of what they offer their customers. New models of mobility will necessitate insurers unbundling all-in-one vehicle policies and providing policies specific to the needs of users. That may well take the form of a unified ‘pay-as-you-use’ mobility policy that covers users for whatever model of transport they choose to use and when they choose to use it.