Telematics rates and their reliance on artificial intelligence and IoT have been discussed here before. Two major players are now quickly starting to implement this vision. This can send a message to the entire industry.
The term mobility transition is often reduced to just one aspect. Reports often focus on replacing combustion-only engines and introducing alternative drives in the form of regenerative or less polluting energy sources. But mobility transition comprises another attitude to the car itself. Instead of owning a car that sits unused in the parking lot, a growing number of users are betting on alternative models. Carsharing is just one of the possibilities here. From the service provider and the insurance company’s point of view, the risks of road traffic are still there. Risks that need to be insured. “Pay-per-use” is the magic word here, not only for car use but for insurance coverage.
Daimler and Swiss Re are founding a new company
Movinx is the name of a new company that was founded by the Daimler Group and the reinsurance company Swiss Re. Based in Berlin, the joint venture will develop fully-digital car insurance, especially for the small vehicle segment. As reported by the companies in their press release, the idea is to be prepared for the time when the long-term ownership model will be replaced by a use-based only model. The companies revealed that the development of offers between insurers and car manufacturers will be the focus of the joint venture. With this in mind, Movinx will be open to collaborating with other car manufacturers and mobility service providers in the first phase.
AI will provide product development support
To develop new solutions, the company will rely on the data provided by driver assistance systems and self-driving cars. It is planned to use systems with artificial intelligence as well. This is something Swiss Re is very agile in. The company already has partnerships with Google’s parent company Alphabet (health insurance), Hitachi (digitalization risks) and the Chinese Ping An (AI).
Time for further development of insurers
This ambitious new step emphasizes the importance of the transition in the insurance business. New mobility concepts and self-driving cars are examples of developments that are no longer adequately covered by traditional policies and products. Digitalization also brings with it new challenges in this area from pricing to claim processing.
The German insurance industry can consider itself lucky that the new company comes from the finance business, at least in part, and sees its role as that of a general agent who will also offer white-label solutions. This way, the founding of this company is “just” a missed opportunity for other companies. It could have been a technology company outside the industry, resulting, in addition to losses, in a (further) loss of customer access in the future.