December 23, 2020 by Liberty Mutual Canada
Emerging technologies and the COVID-19 pandemic have propelled the need for carriers to develop new ways of insuring the future of transportation.
COVID-19, in particular, has highlighted how transportation and mobility patterns can change in an instant.
For example, as a result of social distancing policies and regulations arising from the pandemic, Canadians have been less inclined to brave subways, buses and other forms of public transportation.
“I think you are going to see people getting more comfortable using different mobility solutions,” predicts Ryan Spinner, Head of Mobility at Liberty Mutual Canada. “For example, during the summer, when we were in the midst of COVID, we saw a massive uptick in bike and scooter usage in cities that allowed these services. And that made sense. People still have to get around, but with many people less likely to use public transportation due to COVID concerns, bikes and scooters were a great option, and we saw their adoption skyrocket.”
Even before the pandemic, an explosion of new technologies changed how Canadians move around. People are now stepping into the cars of strangers through ride-sharing services. They are driving semi-autonomous vehicles that can apply brakes on behalf of human drivers. They are using telematics to more accurately assess their auto insurance risk. They are sharing cars or using subscription services to access cars.
These emerging modes of transportation are putting pressure on traditional underwriting models, which have historically made clear distinctions between personal lines versus commercial lines auto products.
Those clinging to this traditional view will soon become hard-pressed to underwrite and provide innovative solutions for emerging mobility risks, predicts Rob Marsh, Executive Vice President of Commercial Insurance at Liberty Mutual Canada.
“We recognize that underwriting future mobility requires a new approach to meet this variety of needs,” Marsh says. “It’s not as clear-cut as it may have been in the past, where it came down to personal vs. commercial insurance. It really requires a fundamentally new approach.”
The new approach at Liberty Mutual includes the creation of a cross-functional “Mobility Pod.” It’s a dedicated, multi-disciplinary team of insurance professionals whose expertise spans across personal lines, commercial lines, automobile, general liability, regulation, legislation, risk services, and claims.
“We believe the future of mobility is at that really cool intersection of technology and consumer adoption,” says Ryan Spinner. “So, the question then becomes: Where does the liability lie? This is the challenge a lot of companies are trying to figure out. And this is where we can help by bringing our expertise to clients and brokers.”
The concept of mobility covers just about every aspect of transportation, from scooters to space travel, as well as the delivery of packages and products from retailers to consumers. It also considers how urban infrastructure is changing to accommodate new forms of transportation, such as car subscription for changing behaviors of car buyers, or constructing condominium buildings without parking garages. Each risk in this amorphous field of mobility requires a unique approach to insure it, and Liberty’s underwriting is designed with flexibility in mind.
“Brokers love this approach,” Spinner says. “They like that we understand the unique challenges of this mobility ecosystem. They like that we’re flexible and that we create products and solutions that are not cookie-cutter. They also value our regulatory intelligence and experience: We have a long history and experience working with different regulators across North America, and this is important, as speed to market is key for our clients.”
Innovative claims handling is also an important consideration. Like auto underwriting, claims handling tends to follow the traditional divide between a personal insurance claim and a commercial insurance claim.
“These distinctions are getting blurred as technological changes spawn new ways for people to get around,” says Spinner. “Given the structure, sophistication and growth of the companies we work with, risk solutions require innovative insurance products and services. It’s no small feat to offer sophisticated pricing with limited data, manage claims with a clear understanding of both the perspectives of the layers of insureds and a range of manuscript coverage language, while also delivering a satisfying customer experience.“
Primarily U.S.-focused, the Mobility Pod collaborates with the Liberty Mutual Canada mobility team to create a broader North American experience that has been proven valuable for Canadian clients. Many Canadian mobility clients either started in the United States or plan to expand to the United States, and not all insurers can offer a holistic North American solution.
“Our differentiator in Canada is around our North American solutions,” as Marsh explains. “When you talk with OEMs [original equipment manufacturers], the technology providers, the customers that are really driving a lot of this commercial activity right now, most are North American, if not global.”
By working with an insurer that knows the lay of the land — down to every twist, turn, and potential pothole — shared mobility providers can not only create superior products and services, but better position themselves for growth further along the road.