Roland Berger, the German strategic consultancy firm, through the Rethinking motor fleet insurance survey, wanted to investigate new opportunities for the insurance industry in the 'fleet' sector, in a context of great social, economic and environmental change such as the one we are experiencing.
Fleets now account for less than 10% of motor insurance in terms of the number of vehicles used, according to the report, and about 15% of total premiums. Many European motor insurers have therefore given it a lower priority. Others have even dropped out of the field. However, according to Roland Berger, it is time for insurers to rethink the situation.
The phenomenon of car use is growing in a global scenario with a view to sharing, and this is due to the strong urbanization (in Europe the urban population reaches levels higher than 70% compared to the countryside and in 2050 is expected to reach a level close to 80%), which combined with the urgency of environmental sustainability, requires new models of mobility, resulting in an impact also on the insurance industry. Strong urbanization and environmental sustainability make it mandatory to transform urban mobility, and technology makes adequate responses possible, as shown by the flourish of platforms and services based on sharing economy. A growing trend, supported by a cultural change, evident in the Millennials, who give ever less importance to the ownership of an asset (such as the car) to encourage its use.
On the other hand, the technology now applicable to means of transport provides real-time data and allows a direct connection between insurer and user, encouraging the spread of new models of collective transport, thus becoming a real accelerator in the urban mobility revolution. By 2020, almost 100% of newly registered vehicles will be sold with integrated technology systems for connected cars, enabling the assessment of the risk linked to the real driving behavior of the driver through data analysis, allowing insurance companies to operate with greater awareness, reducing risk variables and allowing the offer to be adapted to real risks. The shared use of cars is an attractive solution in terms of efficiency and environmental sustainability. In large urban centers the sharing trend will prevail over ownership, thus allowing for a greater shift towards car sharing.
In a nutshell, the city car pool will increasingly consist of fleets rather than private cars; and big data technologies will allow the development of new insurance models.
Car fleet insurance will therefore become very important for companies over the next five to ten years, according to Roland Berger. However, companies must be willing to develop appropriate skills, refine their value proposition or create a new one from scratch, rethink their underwriting and service models and promote partnerships with technology companies and OEMs. In particular, manufacturers, driven by competition becoming aggressive in the automotive industry and by new opportunities and challenges offered by the connected car, are now very tempted to expand into the insurance sector, offering a full range of services, including the insurance policy.
« Mobility models are rapidly evolving and Italy's role in insurance can be crucial in meeting new business needs. » said Edoardo Demarchi, senior partner at Roland Berger. «Italian companies hold more data than any other on driving styles and dynamics and have developed over the years, or at least are able to develop, extremely precise predictive models of drivers' behavior. Therefore, these are well placed to act as drivers for the development of new fleet insurance plans for corporate fleets (and beyond). The PAYD (pay as you drive) and PHYD (pay how you drive) models will also benefit, as they will be valuable in creating real “à la carte” policies.».