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Global Automotive Insurance Growth Opportunities

  • Report

  • 78 Pages
  • September 2021
  • Region: Global
  • Frost & Sullivan
  • ID: 5457028

New Connected, Autonomous, Shared, and Electric (CASE) Mobility Models Will Lead to Transformational Growth

This report identifies the new scenarios that are impacting the automotive insurance industry and the evolving and new business models in this space. The study identifies and analyzes the trends and the shifts in the industry, focusing particularly on 4 areas - connected, autonomous, shared, and electric.

The automotive insurance industry has witnessed a rapid transformation over the last few years to become a smarter industry. The traditional one-for-all approach in terms of premium rates is becoming a thing of the past. Insurance rates today are driven by algorithms that are based on a number of factors that capture the true cost of risk. This provides significant cost savings to both the insurance firms and the insured.

These changes in the automotive insurance industry can be largely attributed to innovations happening within the mobility space. Technological evolution has brought about disruptions in mobility, resulting in connected, autonomous, shared and electric (CASE) solutions. This, in turn, has resulted in new types of risks in the mobility landscape that needs to be covered by insurance, thereby making traditional insurance solutions redundant and further requiring a change in the way insurance is assessed.

Currently, the connected vehicle space is driven by telematics and data-driven models that create new insights on driver behavior. This has also led to smart/digital accident detection and first-notice-of-loss (FNOL) solutions that enable more accurate real-time claims. With innovative shared mobility models set to become more normative, firms will look to capture multiple risk periods and scenarios to provide insurance cover by the minute. The market for insurance for electric vehicles (EVs) is still in a nascent stage. As the market evolves, it is likely to lead to more data surrounding EV battery performance and fires, lower component costs, and a developed used-part and aftermarket channel, all of which will attract innovative insurance business models.

The autonomous vehicle (AV) market is currently largely untapped. Beyond 2025, with regulations kicking in, the market for AV insurance will take shape, largely driven by the new autonomous safety features that will cause significant changes in terms of calculations for premiums and regulations surrounding liability in case of an accident.

Table of Contents

1. Strategic Imperatives
  • Why Is It Increasingly Difficult to Grow?
  • The Strategic Imperative 8
  • The Impact of the Top Three Strategic Imperatives on the Auto Insurance Landscape
  • Growth Opportunities Fuel the Growth Pipeline Engine

2. Drivers and Restraints
  • Growth Drivers for Automotive Insurance
  • Growth Restraints for Automotive Insurance

3. Introduction to Auto Insurance
  • Evolution of Auto Insurance - Major Shifts within the Auto Insurance Market
  • Portfolio of Insurance Service by Major Traditional Players
  • Trends Impacting Traditional Auto Insurance
  • OEMs Entering the Insurance Space through Collaboration
  • Impact of Connected, Autonomous, Shared, Electric (CASE) Solutions on Traditional Insurance

4. Connected Insurance
  • In-vehicle Electronics to drive New Connected Vehicle Insights in Insurance
  • The Connected Car - A Smartphone on Wheels
  • Otonomo's Connected Car Marketplace - Impact on Auto Insurance
  • User-based Insurance (UBI) Driving New Insights
  • UBI leading to Contextual Driver Behavior Score
  • Amodo's Pay-how-you-drive Model
  • Metromile's PPM Model
  • Accident Reconstruction - A Boon to Insurance Providers
  • Digital Accident, Detection, and Response (ADR) - Beyond Insurance
  • MDGO's ADR Solution

5. Shared Mobility and its Impact on Insurance
  • Major Traditional Players Offering Some Form of Shared Mobility Insurance
  • Changing Insurance Landscape for Ride-sharing/Ride-hailing
  • Changing Insurance Landscape for Car-sharing
  • Changing Insurance Landscape for Micromobility
  • Shared Mobility Insurance Model by Different Risk Periods
  • Tesla's Insurance Model For Ride-hailing
  • Tesla's Insurance Model a Challenge to Uber/Lyft
  • UBI to Transform Shared Mobility Insurance, a Use Case
  • Trov's Embedded Insurance Model
  • Future of Ride-hail Insurance to include Medical Cover - Little's COVID-19 Insurance

6. Electric Vehicles
  • Electric Vehicle (EV) Market - Current Insurance Scenario
  • Battery Issues - Factors Impacting Battery Performance
  • EV-related Fires and Implications for Insurance
  • As the EV Market kicks-off, Battery Fires become a Cause of Concern
  • Other Persisting Challenges and Risks
  • EV Risk Implications on Auto Insurance and Claims
  • OEMs' own Insurance Solutions - The Case of Tesla
  • Insurance Add-ons to Cover Expensive EV Components
  • The Future Case of Driver Charging-behavior Insurance
  • Swiss Re + Twaice - A Performance-based Insurance/Warranty for Li-on Batteries
  • Special Purpose Vehicles (SPVs) and New Insurance Models

7. Autonomous Vehicles
  • The AV Market and Insurance
  • Degree of Autonomy vs. Insurance Premium
  • Impact of Autonomous Safety Technology on Claims and Injuries - Crash Avoidance Technologies
  • Autonomous Vehicles creating New Insurance Focus Areas
  • Swiss Re's Innovative ADAS Risk Scorecard
  • Transfer of Risk - Shift in Liability Cover from Drivers to OEMs
  • Self-driving Vehicle Fatalities and the Relevance of Insurance Firms
  • Future Roadmap of the Motor Insurance Industry

8. Growth Opportunity Universe
  • Growth Opportunity in EV Market - EV Standards for Granular Insurance Liability
  • Growth Opportunity in Connected Vehicle Market - Regulatory Compliance for Greater Accountability
  • Growth Opportunity in Shared Mobility Market - Granular Risk Identification for Flexible On-demand Insurance

9. Next Steps
  • Your Next Steps
  • Why Now?
  • List of Exhibits
  • Legal Disclaimer

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Amodo
  • MDGO
  • Metromile
  • Otonomo
  • Swiss Re
  • Tesla
  • Trov
  • Twaice