Mobility and Transport

The future of mobility – how insurers can become part of a new ecosystem

The automotive and mobility industry is undergoing major transformation. And insurers will need to change too if they wish to keep pace with it.


With a Group-wide mobility initiative, Munich Re sets new standards for its clients in future within a rapidly changing mobility ecosystem. Primary insurers, reinsurers and reinsurance consultants are joining forces to develop new products and solutions for risk management.

Hendrik Todte, Managing Director at ERGO Mobility Solutions (EMS), a Munich Re automotive and mobility subsidiary, Mike Scrudato, Senior Vice-President at Munich Re America in Princeton, NJ and Falk Albers, Head of Motor & Mobility Consulting at Munich Re in Munich gave us their views on new risks and future opportunities for insurers:

Where do you see the greatest challenges for the mobility industry?

Falk Albers: We are currently at the centre of a transformation. The way we move around has changed fundamentally in just a few years. Mobility generally used to mean driving a car from A to B, but now we are confronted with a panoply of transport possibilities for a single journey – from our front door to our destination. They include car and bike sharing, shared taxis and micro-mobility solutions such as kick scooters and e-bikes.

Continuing urbanisation in many parts of the world is also driving development of new mobility concepts. In addition to that, consumers are increasingly considering environmental aspects when making their choice. Technological innovations are providing the stimulus for an ever expanding range of mobility solutions. The boundaries between vehicle purchase, leasing, subscription, sharing, rental and on-demand are becoming more and more blurred. The idea of owning your own vehicle could be on its way out and be replaced by subscription and on-demand shared-use models.

What will that mean for insurers?

Hendrik Todte: Insurance and mobility go together. Insurance needs to be a part of the new mobility offerings. In addition to insurance-only products, we increasingly have to offer data-driven risk solutions, technology-supported fleet products and state-of-the-art rating and actuarial services. 

These new technologies require an evolution of our business model. Everything in the value chain – from product development, (digital) distribution via risk management up to the way we collaborate with mobility providers – will be quite different in the future.

In order to assess and proactively manage risks, insurers will have to be able to access, consume and analyse large volumes of data. Ideally, our risk services are deployed within partners’ infrastructure. Real-time data exchange via Rest-APIs will only be an intermediate step. We will therefore be offering our clients algorithm-based risk solutions to complement insurance products.

New car technologies such as e-cars are, of course, particularly important for our OEM clients, and we will develop solutions in line with their needs, either in-house or through partnerships with state-of-the-art engineering partners.

And not least of all, strategic partnerships such as the cooperation of Ergo Mobility Solutions with BMW in Germany and Great Walls in China are enabling us to offer innovative, customer-centric and flexible digital product solutions.

What is your strategy and which markets will you be focusing on?

Mike Scrudato: We have identified five markets that offer significant business potential - behavioural insurance products, autonomous vehicles and ADAS, electric vehicles, mobility-as-a-service (MAAS) fleets and tech-enabled fleets. We are also working with our cyber experts to develop solutions for the growing cyber exposure within these new mobility models.

We essentially see ourselves as a global market leader focusing on the needs of individual markets. For example, we have seen more interest in electromobility in China, whereas for the USA we have introduced new commercial fleet products and services and autonomous vehicle insurance solutions. We also intend to bring more of these innovative solutions to Europe, and we will not, of course, be neglecting ERGO's anchor market in Germany. But we are also active in smaller, promising markets exhibiting good growth rates, such as in India, where HDFC ERGO is partnering leading automotive companies.

How do our clients benefit from this?

Falk Albers: We undertake all the consultancy work and support our clients from the initial idea all the way through product development and implementation to pricing and underwriting.

The distinct benefits for our clients include the collective development and implementation of tech-aided insurance solutions. We offer products as White-Label solutions, and thereby enable clients to go to market speedily and efficiently. This is often associated with cost savings and operational efficiency. The product focus is on the additional service for the end customer. Moreover, behavioural driving scores and pricing insights, enhanced by our solutions for portfolio management, optimise the quality of business.

What insurance solutions do you offer?

Falk Albers: The automotive industry has reacted to the changes in user behaviour with electrified vehicles and new mobility solutions on the product side. But also, relationships with consumers is changing with a more service and value-driven approach, focusing on experience rather than the purchase transaction. This is true for insurance as well. We are supporting our clients here with consultancy, products and services. Our solutions include

  • behavioural insurance products (pay-how-you-drive and pay-as-you-drive solutions)
  • comprehensive risk management solutions for fleets
  • tailored insurance solutions for electric vehicles (product and pricing)
  • digital damage services and damage control
  • actuarial and data analytics services
  • solutions for portfolio control and portfolio management

Could you name a specific project?

Mike Scrudato: Our focus areas for the US market are tech-enabled fleets, mobility as a service, and autonomous vehicles. We have made the greatest advances with tech-enabled fleets. The aim is to improve commercial fleet safety.

We are now integrating our services into commercial auto insurance solutions from Munich Re Specialty Insurance.

Our offering is based on LossDetect, a patent-pending loss analysis tool. Clients are able to upload their loss details directly onto our platform. Using the data, LossDetect automatically determines the loss amounts for accidents that were potentially preventable through existing technology solutions. We have analysed over $5bn in commercial auto fleet losses in the US market, and determined that over 2/3 of them were potentially preventable.

Based on the results, we prepare a tailor-made, technically focused plan for every client. To do this, we work closely with technology partners, who are global leaders in the field of risk management specialising in telematics, camera recordings, driver training and advanced driver assistance systems. Together, we establish which technology would have been able to prevent or minimise the impact of the types of loss occurring most frequently and specific to the fleet in question.

Is mobility-as-a-service a growth market for insurers?

Mike Scrudato: Yes, it is, but this model has been impacted by Covid and insurance remains a challenge for many of these platforms. However, we are talking here about risks that many insurers would not have categorised as core business in the past. We help platforms and insurers to understand and correctly evaluate the business model of the new mobility players.

Take car-sharing fleets for example. There are three different client groups – the platform itself, the owner of the vehicle on the platform and the driver. Insurers can offer products and services for each group, for example corporate cover on platform level, a fleet policy for the vehicles put onto the platform, and solutions for the individual drivers.

Is embedded insurance on the way to becoming mainstream?

Hendrik Todte: Absolutely. An important prerequisite for developing embedded insurance products is the ability to process and analyse the data generated by interconnected vehicles. Usage-based insurance was only a first step in this direction.

Cars nowadays have powerful operating systems, comparable to today’s smartphone operating systems, that can be updated and upgraded regularly.

Insurance solutions will run inside the car - the same way apps do on your mobile device. This will reduce costs and complexity – and will even be fun for customers!

What will mobility of the future look like?

Falk Albers: The mobility of the future will be defined by both technical and digital innovations and people's changing needs. It is always difficult to predict how people will behave. We are living in unprecedented times, and Covid-19 has changed our behaviour dramatically – how we work, our private lives, and also how we consume mobility.

In insurance, we see an increasing demand for more tailored and customer-centric products that reflect the behaviour of consumers. Shared-mobility offerings and micro-mobility solutions will certainly continue to grow, especially in urban areas. In general terms, mobility is shifting from an ownership to a subscription model, and that is where we will see further and accelerating growth.

Our experts
Falk Albers
Falk Albers
Partner - Head of Commercial Motor & Mobility
Global Consulting
Michael Scrudato
Michael Scrudato
Strategic Innovation Leader, Incubator - Mobility