Insurance Innovations Currently Impacting the Mobility Industry

Sitting Down with Tint’s In-house Mobility Expert: Chris Aragon

We sat down with Tint’s mobility expert Chris Aragon to discuss how insurance impacts the mobility industry, the latest trends, and what you should keep an eye out for in terms of mobility innovation today and on the horizon. 

Aragon comes to Tint with 18 years of experience with companies like Turo, Outdoorsy, and Progressive. Over his mobility career, he has built out risk management teams and claims functions, and contributed to new insurance launches for Outdoorsy, Roamly, and Getaround. At Tint, he runs all our mobility programs and manages our claims team.

The Current Insurance Landscape for Mobility

When it comes to mobility, it’s important to consider that the current landscape is very different when we look at traditional insurance providers and what is happening in the embedded insurance market. Those differences impact the way that consumers interact with the insurance that protects them and their vehicles while they are booked on trips and are being used while off a trip. Let’s take a closer look at two key factors impacting insurance for the mobility market today: pricing inefficiency and data collection.

Pricing Inefficiencies & The Impact on Consumers

It’s currently a difficult market. “Underwriters don’t have access to all the data they need to price risk”, says Aragon, “at least not the way it should be priced.” Traditional providers are more than capable of writing a policy that addresses the needs of the mobility market. There are several examples of this happening already today. However, the “big box” insurance providers aren’t able to gain access to data that would help them price the risk more accurately. This means that more assumptions are used to build their pricing. According to Aragon, “This puts underwriters in a position where they need to assume higher risk which translates to higher premiums for consumers downstream.” 

It isn’t only traditional providers that face challenges in today’s market. Embedded insurance companies also struggle. While embedded insurance providers have better access to data than their more traditional counterparts, getting that data and using it for underwriting purposes is still a work in progress.

The Promised Land: Data Collection For Underwriting 

The key to unlocking potential when it comes to mobility insurance is data, data, and more data. Many embedded players claim to do this today but few are doing it in a way that truly benefits the consumer by maximizing the data that is already being collected by the platforms they use. 

The only way to reap the benefits of better underwriting is to combine embedded insurance offered through the brands consumers are already working with and deep data exchange. While there are embedded options on the market today, few and far between are the programs also connected with a well-thought-out data exchange. “The goal with all of the programs we build”, says Aragon, “is to access the data we need to pass a benefit to consumers.” These benefits can come in many forms but for right now, let’s focus on the underwriting benefit. Better pricing. That is really what it comes down to. Aragon believes that “keeping the focus on driving a better experience and more intuitive pricing is what will help to make a more sustainable future for consumers that need specialized commercial auto policies to run their businesses.”

The promised land may be closer for more consumers. “At Tint, we are already doing this today. Every day, we can see the rewards of data-rich exchanges with the platforms we work with.” Aragon has worked on the insurer side of things, the brand/platform side of things, and now is helping lead the charge with Tint to pave the way for more intuitive programs that use data already being collected to provide real and instant benefits for consumers. 

LTV & Revenue Growth with Embedded Mobility Insurance

Creating lifetime value (LTV) and new revenue streams is what every platform should be seeking with any embedded insurance partnership. Brands spend thousands, if not, millions of dollars each year to acquire new customers. To make the most of that investment, they need to be laser-focused on creating higher lifetime value for every customer they acquire. 

Creating ‘stickiness’ and continually improving user experience (UX) is critical for growth. Embedded insurance is poised to help platforms deliver more and more of what their customers need and want from an insurance provider.

“I’m not only trying to build the future of embedded insurance for mobility but I’m also a consumer of these programs.I can tell you firsthand that if I have to take an hour to manually type of each of my vehicle's data, I am simply not going to do it. I know that most other consumers won’t either. That’s why we’ve taken care to build an experience that makes it seamless, quick, and easy to obtain a quote.”

It all comes down to the data, yet again. Platforms today are sitting on a goldmine if they work with the right partner. Embedded insurance programs' attachment rates vary but a general rule of thumb is between 1% - 10% (based on our own data). Well-performing programs can see over 20% attachment rates. This can translate to millions of dollars in premium each year and significant revenue through technology fees for platforms, plus increased satisfaction and stickiness of their users. 

Innovation Opportunities for Mobility Insurance

The industry still faces challenges but there is hope on the horizon, especially when it comes to embedded insurance. We asked Aragon what he would like to see materialize when it comes to insurance innovation. 

Aggregators as Insurance Distributors

There are several aggregator platforms out there that make it easier for the gig economy, which makes up a significant part of the mobility market today, to manage their day-to-day business needs. This is an area of the market that Aragon believes will continue to grow, “Gig drivers don’t use just one platform. They maximize their earning by listing themselves on several platforms.” Aggregator sites are poised to make use of the data they already collect and provide a better experience for their users with embedded insurance.

Sharing Risk to Provide The Best Coverage

In the mobility sector, insurance that provides coverage 365 days a year, 24 hours a day is quickly becoming outdated. It doesn’t serve the needs of the market and will quickly be outpaced by platforms and embedded providers that are taking a more nuanced approach. There is an opportunity to take out the guesswork and unknown variables when platforms take on some of the risk. 

What does this mean? Aragon explains that “By providing coverage directly to their end-users while they are on a trip or hosting their vehicle out to a guest, platforms can demonstrate their commitment to their users. Thinking of coverage as being “on-trip or “off-trip” allows us to build more customized risk profiles. The behavior and therefore risk profile of drivers on a trip vs off a trip is very different. If we can provide unique coverage for those use cases, we can get better coverage and better pricing efficiency for both scenarios.”

When policies are drafted in black and white, they miss the nuance of how the mobility market actually operates. At Tint, we’ve rethought what is really needed. Rather than building a policy that covers 365 days a year, we cover the “off-trip” period of time. The time where there is a large need that isn’t already covered by platforms. Not only have we designed coverage that is innovative and intuitive but we also encourage platforms to think about what their users really need and seek a partner that can help deliver.

Looking Ahead

While big strides have been made in the mobility space, there are several exciting opportunities that indicate there is much more to come from this market. While embedded insurance doesn’t solve all the challenges the industry faces, it does provide a direct way for platforms to address LTV and revenue growth - while providing a superior program and experience for their users. 

If you are interested in learning more about the latest mobility developments please subscribe to our blog or reach out to our team of insurance experts directly to embed insurance in your platform. If you want to partner with Tint on new innovative mobility opportunities as an insurer, we’d love to hear from you.