Telematics: reframing risk for sharing economy
On-demand. Sharing economy. Gig economy. These buzzwords tend to stir up reactions from insurers around a key question: how do we accurately price risk for the changing transportation industry? More questions continue to unfold as we unpack this question: Who are today’s drivers, why are they driving, how and how often are they driving, and what is their relationship to their vehicles? Most importantly, how do all of these things impact drivers’ exposure to risk?
At Arity, we’re using our foundational expertise in analyzing risk to address these questions. We’re examining how more personal policyholders driving for commercial purposes affects the intersection between personal and commercial coverages. There’s a less clear-cut boundary between personal and commercial definitions, and the need for mixed coverage is becoming an absolute necessity.
We are actively working to enable insurers to meet this need. What’s clear so far is that each type of mobility model represents a distinct risk profile. A rideshare driver is going to drive differently than a peer-to-peer day-tripper or a car-subscription car-flipper. So, our job is to understand the behavioral differences between each type of vehicle-driver relationship.
Fortunately, insurers are already guiding the sharing economy industry on how risk can be used to advance their business goals. Arity is further facilitating this relationship, offering both carriers and sharing economy companies access to telematics-based scores that help communicate and control risk. We’re opening up this data because we believe that helping insurance providers and sharing economy companies speak the same language of risk is key to improving personal transportation over time.
We collaborate across the industry with this mission in mind. We need to foster transparency and garner support from the entire transportation ecosystem to successfully shift how insurance products work. When we reframe how risk is defined, we’ll be able to understand and insure varied and dynamic types of risk, whether it’s usage-based, mileage-based or possibly even motivation-based.
Learn More: Arity Sharing Economy Solutions