How French insurers are adapting to the new mobility landscape
New forms of mobility are compelling insurers to redesign their products and rethink their business model.
According to a study published by Facts & Figures, in 2047 the use of shared transport (49%) will surpass individual vehicle ownership (26%), whereas at present ride sharing accounts for only 2% of total car travel. The inevitable decline of the private vehicle is causing disruption across the entire insurance industry. “We are moving from an ownership economy to an access economy,” says Christophe Sabadel, head of Automotive and Mobility Products for French mutual insurer MAIF, “and we need to anticipate it”. New mobility options like car sharing, free-floating transport and personal transport vehicles (PTVs) are “no longer fringe solutions,” explains Yann Arnaud, head of Products, Innovation and Risks at mutual insurance company MACIF. “They have entered the mainstream, and we need to adapt by offering our policyholders new types of cover. We’re going through a period of transition.”
Car sharing products
Car pooling doesn’t require providing any additional insurance because the driver’s compulsory third-party liability policy extends cover to passengers. The ride provider and the riders are thus automatically insured. In free-floating and station-based car sharing systems, both the vehicle and the user are usually covered by the contract drawn up between the insurer and the service provider.
AXA, however, has developed a special temporary car insurance policy called Ma Mobilité for drivers in car sharing or car pooling arrangements. MATMUT offers Autopartage, an extended warranty that provides full cover to policyholders who rent out their vehicle either by themselves or through a rental platform. GMF’s Auto Pass solution provides comprehensive cover to policyholders who either rent a car – from another person, a traditional rental agency or a car-sharing service – or rent out their own vehicle.
Electric personal transportation devices – a legal vacuum
But the real headache for insurers is electric personal transportation devices (EPTD). The legal void surrounding electric scooters, hoverboards, electric unicycles, Segways and other e-riders has given rise to a number of risk and coverage issues. “There is still no legislation on EPTDs, and neither the highway code nor the insurance code has been amended to take into account their existence,” says Mr Sabadel. “Meanwhile the market is mushrooming, and we’re seeing a sharp rise in the number of accidents – either a rider knocking someone over on the pavement (civil liability), or a rider taking a fall.” With one-third of the French population having already tried an EPTD, and 57% planning to use one in the future, according to a survey conducted by Prévention Routière, the insurance industry is impatiently waiting for the new law on mobility (LOM) to clarify the issue.
Many users think EPTDs are gadgets and don’t realise that they need to have insurance, when in fact the devices are classified as motorised land vehicles. The law still doesn’t require users to wear a helmet or gloves, which increases the risk of an accident. So MATMUT is “thinking about” developing “a product tailored to EPTDs…a sort of insurance package specially designed for these mobility options,” says Dominique Filsjean, head of Property and Casualty Insurance. MAIF has decided to take a proactive approach to EPTDs by automatically covering users via their home insurance policy, without requiring them to declare the devices.
Insurers are also being driven to develop innovative solutions in response to the growing multi-modal market. For example, MATMUT’s 4D auto insurance policy now offers a reduced rate for customers who use their vehicle solely in conjunction with some other form of transport, such as the bus, subway or train. “It’s all about eco-mobility,” says Mr Filsjean. “We try to encourage the use of public transport.”
The MAIF subsidiary Altima has launched an experimental offer called “pay-per-minute auto insurance”. It consists of a smartphone app that syncs with an onboard Bluetooth beacon to detect user journeys and calculate cost based on driving time. In this way, the insurance rate is adjusted to the real use of the car.
Cyber insurance for autonomous vehicles
The biggest disruption to the insurance industry is being caused by autonomous vehicles. Determining who is liable in the event of an accident – manufacturer, driver, radar designer, insurer – is a thorny question. At the same time, many people claim that self-driving cars equal zero risks, and some manufacturers are already talking about insuring their vehicles themselves. Does this spell the end of the traditional auto insurance policy? “The risk won’t be zero,” says Mr Sabadel, “it will be different”. “There will always be a risk of vandalism and weather damage, but especially of hackers trying to steal personal data. It’s possible to imagine an even more malicious attack, like someone trying to cause you to have an accident, hijack your car or, even worse, create a systemic risk across an entire fleet. Insurers will definitely be part of the picture there.” Cyber insurance is poised to play a key role in the insurance industry of tomorrow.