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New mobility and transport

New mobility risk taking enabled by the connected car ecosystem

Motor insurance is on the brink of dramatic change – driven by the trends of connected, autonomous, shared and electric (CASE). 
41 %
This is the amount the traditional motor premium pool that will shift to these new domains by 2030. It is a necessity that our industry rethinks strategy, capabilities and skill sets to keep our edge and to remain relevant. 

Your challenges at a glance

Usage-based insurance

Adoption rates for usage-based insurance have soared in recent years now reaching 25m motor insurance policies, up 13m (source: Ptolemus Consulting Group) from 3 years ago. This trend is driven by numerous factors: For example, app products that use smartphones as a sensor allow for cost efficient product implementations; service providers offering easy to launch turnkey products; decreasing technology cost and the ongoing pressure for insurers to innovate and find new ways to get and stay in touch with their customers. The market for active UBI policies worldwide is estimated to be over 25 million, in 2018, and projected to grow steeply to over 170 million by 2025, i.e. by a CAGR of 32%. 

New mobility platforms

New Mobility platforms are the fuel for changing consumer behavior and how we move from A to B. Ride hailing, carpooling, subscription based car ownership and micro mobility such as electro scooters require not just new insurance products but also the development of new strategic partnerships and alliances. 

Electric vehicles

Distribution and registration of electric vehiclese worldwide is hitting new records from year to year. Over 5 million electric vehicles were sold globally during 2018 which is an increase of 2 million when compared to the previous year. One dominant issue is the question of whether electric vehicles, are posing a higher, lower or a comparable risk, when directly compared to ordinary vehicles relying on combustion engines.

Forecast of worldwide market volume of autonomous driving functions

Advances driver assistance systems (ADAS) and autonomous vehicles

Additionally the implementation of advanced driver assistance systems (ADAS) and autonomous vehicle technology is starting to have an impact on how we view risk. 
This leads us to the projection that traditional motor insurance will gradually be replaced by technology-based motor insurance, we also call it smart risk taking opportunity
Within this new segment the ability to capture, store, and analyse behavioural data, mobility pattern, as well as vehicle data will become an integral part to appropriately underwrite, price and drive value for customers. 

94% of vehicle crashes are due to human error. 80% of these crashes may be reduces or eliminated by automation.

ADAS systems as an important step towards autonomous transportation. 

Advanced driver assistance systems, with such safety features as autonomous breaking or lane departure systems, are increasingly being built into today’s cars. This is an important step for increasing safety on our roads and towards the journey of fully autonomous transportation.  

The bigger question is how do ADAS influence the frequency and severity of accidents? And how can the insurance industry take this trend into account when building pricing tariffs and risk models? It is a challenging task for insurers to understand what safety features are built into which cars, how they act across different manufacturers and if they are actively being used by the insured. 

Munich Re has been researching and developing across this field for many years and has a acquired extensive knowledge on the effectiveness of ADAS features. We support our clients globally to understand their portfolio composition, the penetration of ADAS features within their book of business as well as by analysing the impact on risk. 

New mobility platforms are the fuel for changing consumer behaviour and evolving how we move from from point A to B. Ride hailing, carpooling, subscription-based car ownership and micro mobility such as electro scooters, for example, require not just new insurance products but also the development of new strategic partnerships and alliances. 
While insurance may not have been at the forefront of many founder’s minds in the early days, it is now fundamental to the business models of all new mobility platforms, be it for regulatory compliance, consumer trust or balance sheet protection.   

Understanding the business model 

It is important for insurers to really understand the business model of these new players in order to influence appropriate product designs and services. If we take ride sharing as an example, there are three distinct client groups within each journey: the platform itself, the driver and the passenger. Insurers have the opportunity to deliver products and services to each of these groups, whether it be corporate coverage at platform level, dynamic motor coverage for drivers or experience enhancements for passengers. 

Risks & opportunities

There is no doubt that the new mobility sector represents a massive opportunity for insurers.  

These segments represent risks that a large proportion of primary insurers would classify as non-core or edge of appetite for a number of reasons: the fluid nature of the users, urban locations, high vehicle utilisation, increased passenger exposure, unproven claims history, untested technology as well as how the new models fit in to existing infrastructure and social acceptance. 

What can we do to mitigate? 

At Munich Re we understand these risks and have a proven track record of creating innovative products and services that deliver value. We have the opportunity to utilise vast amounts of data like never before to establish new underwriting methodologies, sophisticated product design and acceptance criteria as well as real time incentivisation in order to deliver products that really add value to customers. Consumers have the opportunity to make a profitable contribution to insurer portfolios as well. 

Connected insurance is becoming mainstream. In 2018, we reached 24.3m UBI policies (+47% yoy) with 403 programmes in 54 different countries. However, only two markets globally reached an insurance penetration above 10%: Italy, the pioneer of using telemetry data for fraud (17%) and South Africa, with a strong use case on theft (10%). The smartphone as a sensor is now transforming connectivity even further. Via apps we can now turn our mobile phones into powerful connected car devices. This significantly reduces costs and complexity while increasing the overall customer experience.  

The mobility behaviour of consumers is changing through a more connected, shared and on demand transportation offering. Yet, privately owned cars are becoming more connected and intelligent as well. This requires the insurance industry to adapt and develop insurance products that fit the needs of the customers of tomorrow. The ability to capture, store and analyse behavioural, mobility and data generated from the connected car will be a key competence. This will serve as an enabler to build connected insurance products going forward. Usage-based insurance is a first step in this direction. 

We have built extensive knowledge and thought leadership within our Global Consulting team and developed a set of hands-on services that help accelerate the journey of our clients towards a connected, data-driven and digital insurance product factory. 

There are many societal benefits and positive arguments for vehicle automation. Over 1.24 million people are killed each year as a result of road collisions, not to mention the vast number of individuals and families affected by life changing injuries suffered in road accidents.

While it is difficult to put an exact number on how many of these collisions could have been avoided, our research shows that 94% of crashes can be attributed to human error, we believe that around 80% of these accidents could be avoided with the predicted increase in automation. That equates to just under 1m lives saved each year as a result of autonomous vehicles. 

While there is no doubt that the potential societal benefits are immense, there are significant challenges for many industries as the road to automation develops – the insurance industry is no different. 

We believe, that  these 3 key areas w will impact the take up rates of autonomous vehicles:


  • Public acceptance
  • Giving up total control
  • Data privacy issues
  • Cyber-attack concernes


  • Receptive infrastructure needed to allow optimal functionality
  • Costs
  • Territorial limitations


  • Long transition periods
  • Mixed traffic

What does this mean for the insurance industry?

We have reviewed 6 key coverages and predicted how these may be impacted by the rise of automation: 

  • Auto liability - likely to shrink
  • Cyber risk/IoT – likely to increase
  • Product liability – likely to increase
  • Auto physical damage – no material change
  • Equipment breakdown/Warranty – likely to increase
  • Product recall – likely  to increase

Portfolio rebalancing

Even though the reduction in accidents will undoubtedly reduce the need for MTPL covers, or at least a reduction in premiums, insurers also need to consider a potential shift in dependency from retail to commercial risks.

We project that as autonomous vehicle technology becomes more widespread, coinciding with the rise of mobility platforms, this will result in a shift in consumer behaviour towards mobility consumption rather than car ownership. As a result, we may see a shift from retail to commercial dependence. Insurers with retail-dominated portfolios may need to review their business models in order to remain relevant in the future.

How is Munich Re dealing with the rise of autonomous vehicles?

  • Presently covering autonomous vehicles across multiple territories
  • Cooperation with automotive suppliers
  • Partnering with AV start-ups to vitalize progress
  • Cooperation regarding data classification and analysis
  • Participation in nationwide working groups on future mobility and new mobility concepts
  • Development of best practices for safety guards

Distribution and registration of electric vehicles worldwide are hitting new records year to year. In many markets, electric vehicles and their associated infrastructure are still benefitting from government backed incentive schemes. However a gradual shift from traditional combustion engine to green or zero emission vehicles is undeniable.

One dominant issue is the question of whether electric vehicles are posing a higher, lower or comparable risk, when directly compared to typical vehicles relying on combustion engines. 

We have analysed the most prominent factors and predicted how these will impact the risk presented by EVs: 

  • Range anxiety & lack of infrastructure: May lead to an increase in urban use in the short-term. However, as battery technology improves and infrastructure investment increases we may well see policyholder geographical distribution return to normal. 
  • Lack of engine noise: Approaching electric vehicles are not perceived in time by other road users, especially pedestrians, children & cyclists. However, some manufacturers have installed simulated engine noise to mitigate this risk. 
  • High torque potential: This feature in an electric vehicle could entice drivers interested in a sporty driving style. 
  • Repair costs and supply chain issues: Technology of electric vehicles (e.g., components, battery packs, high-voltage components and charging interfaces) complicates repairs of damaged vehicles and leads to increased repair costs and timelines.  
  • Risk of electric shock: In particular after a vehicle crash for drivers, passengers and third parties (police, ambulance, rescue teams and helping hands). 
  • Cyber risk: Electric vehicles are often highly innovative vehicles. This could result in higher cyber and software risk to electric vehicles (hacking, illegal engine tuning, faulty updates, etc.). 
  • Charging equipment: Components could be subject to additional and new risk scenarios such as stumbling over cables in public by third parties. 
  • Hazardous substances: Chemical materials from a leaking or damaged battery could cause severe environmental pollution. 
Contact our experts
Falk Albers
Falk Albers
Global Lead Mobility
Munich Re
Global Consulting Unit

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