ACES megatrend to drive insurance of mobility journey over assets says study

The study found 42 percent of policyholders want a single policy that covers them irrespective of their mode of transportation, whether they are driving a car or using a ride-sharing service. 


Capgemini’s World Property and Casualty Insurance Report, published in collaboration with Qorus reveals a future where insurers will need to evolve from traditional auto insurance offerings to ‘mobility protection’, as urban consumers adopt new mobility solutions that include Autonomous, Connected, Electric, and Shared (ACES) multi-modal options.

According to the report consumers and regulators are placing heightened attention on sustainability, as policyholders worldwide indicate an interest in and support of connected and alternative energy vehicles (66%), and autonomous vehicles (49%).

While consumers are not yet willing to replace their personal vehicles in the short-term, there is an increased desire towards adding new mobility options. The research shows adoption of micro-mobility, shared vehicles, and multi-modal transportation solutions amongst urban customers will double from the present 29 percent to 58 percent in 2025. The report also finds this changing customer behaviour is expected to drive premiums for ACES vehicles to grow eightfold from $70 billion (Rs 577,290 crore) to $570 billion (Rs 4,700,790 crore) by 2030. 

The report states that in light of this mobility revolution, carriers face significant challenges to be able to cover these journeys. Close to 63 percent of insurers are concerned about the adequacy of their technology capabilities and 45 percent about evolving customer expectations. 

Kiran Boosam, Global Insurance Industry Leader, Capegemini said, “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. Organisations that test high-potential mobility value propositions, and scale mobility solutions through connected insurance platforms will position themselves for sustained relevance and growth.” 

Innovative business models 

This new wave of mobility will require carriers to shift from insuring assets to protecting mobility journeys, which will demand new business models focused on personalisation. In fact, 42 percent of policyholders want a single policy that covers them irrespective of their mode of transportation, whether they are driving a car or using a ride-sharing service. 

However, the study states that insurers today are not equipped to meet policyholder expectations. Less than a third of carriers (29 percent) reported they had the necessary product development capabilities, and even fewer (26 percent) said they had the right talent to offer customer-centric mobility solutions.

With ACES mobility gaining scale, embedded insurance models are becoming increasingly popular, raising disintermediation concerns for the carriers across the whole value chain, including distribution, underwriting, and claims management, cites the report. One way to navigate the ACES wave is to create a mobility ecosystem that offers modular subscription insurance to meet customers’ expectations for seamless coverage while delivering differentiated, value-added services. However, only 21 percent of insurers say they have advanced ecosystem partnerships to meet these consumer needs.

The World Property and Casualty Insurance Report 2023 draws data from two primary sources – the 2023 Global Insurance Voice of the Customer Survey and the 2023 Global Insurance Executive Interviews. This primary research together covers insights from 22 markets: Australia, Belgium, Brazil, Canada, China, Denmark, France, Germany, Hong Kong, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Norway, Portugal, Singapore, Spain, Sweden, the United Kingdom, and the United States.

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First published on: 18-04-2023 at 17:48 IST