Capgemini: How autonomous, EVs are shaping auto insurance
Capgemini, in partnership with Qorus, published the World Report Series 2023 Property and Casualty Insurance: From Insuring Assets to Protecting Mobility, which discusses the future of the traditional auto insurance industry and upcoming era of mobility insurance. As consumers begin to adopt new mobility solutions, such as autonomous, connected, electric and shared (ACES) vehicles, the report indicates that insurance companies will have to adapt business models and transition from conventional auto insurance products to mobility protection offerings.
According to the report, mobility insurance is expected to double to a $1.38 trillion market in 2030. Modes of transportation like micro-mobility, which is transportation such as bikes or motorbikes, using multiple modes of transportation and use of shared vehicles is projected to increase from 29% to 58% in 2025, according to Capgemini experts.
“The mobility industry is on the brink of a significant transformation. To successfully transition to this new era of mobility, insurers need to leverage their risk management expertise and partner with specialists like InsurTechs and BigTechs in the ecosystem for protection across a consumer’s entire travel journey. Organizations that test high-potential mobility value propositions, and scale mobility solutions through connected insurance platforms will position themselves for sustained relevance and growth,” said Kiran Boosam, Global Insurance Industry Leader of Capgemini, in the report.
The report notes that insurers will likely embrace new business models to adapt with the changing insurance needs by embracing more consumer personalization in both personal and commercial lines. Highlighted in the report are offerings in usage-based insurance (UBI), embedded and modular subscription service insurance – these technology solutions can enable more dynamic risk assessment capabilities that will be a requirement in risk assessment as the mobility industry rapidly evolves.
“Mobility is at the heart of tomorrow’s world. It is also at the heart of the concerns of insurers [that] must review their business model from top to bottom to adapt to the profound changes that threaten the automobile insurance industry,” John Berry, CEO of Qorus, said in a press release statement.
Less than a third of insurers, 29%, report that they currently possess the development capabilities to meet consumer expectations, according to the report. Only 26% of companies say they have the right talent to maintain customer-focused mobility products.
The report also mentions that a technology business model focused on mobility insurance is of the utmost importance to 67% of insurance companies, though only one in three insurers respond that they have such a plan. Capgemini suggests that, to meet consumer expectations and adapt business models accordingly, insurers can leverage risk knowledge with expertise in the mobility industry to ensure a seamless shift from product sales to delivering more customer-focused mobility insurance solutions.
