Traditional Insurance Companies Need to Evolve for Mobility
The traditional business days of car insurance are “numbered,” as the on-demand sharing economy continues to rise, Grayson Brulte, president of Brulte & Co., told Mobility Buzz, which is why several auto insurers are looking into rideshare coverage.
And Slice Labs, an insurance startup, is no exception.
Slice Labs developed a pay-per-use rideshare insurance app that it is now testing with 50 rideshare drivers. The startup plans to roll out the app — and begin issuing policies — in two cities by the end of the second quarter, Tim Attia, Slice’s chief executive and co-founder, told Mobility Buzz.
Slice bills its product as a first-to-market platform that protects the rideshare drivers while covering the liability associated with ridesharing. The Slice policy is valid for the entire time the driver is logged onto the rideshare app.
Because of Slice’s unique model, it has garnered attention from reinsurance group Munich Re, which shares the risk by purchasing policies from other insurers to limit the total loss to the original insurer.
New York, N.Y.-based Munich Re is attempting to figure out how it can “disrupt its current model” so that it does not go out of business, Brulte told Mobility Buzz. “I think more insurance companies will have to figure that out.”
Many auto insurers including Geico, Allstate, and Farmers Insurance have started offering or testing rideshare-specific insurance in select markets in recent months. However, most of these policies are not on-demand, but extensions of auto insurance policies designed to ensure drivers have coverage until they accept a ride.
Rideshare drivers need to be covered, but purchasing an annual policy — which is the typical option offered by some of the large auto insurers — is not always cost-effective, especially for drivers that only drive 15 hours per week, for example. “We wanted to make it easy, and add a policy with the same experience as an annual policy,” but provide drivers with a pay-per-use policy, Attia said.
Slice and Munich Re have agreed to an ongoing roll-out of products and territories, according to a published report. Slice will supply the technology platform to deliver the products directly to the consumer, and it will also handle the service and processing of claims. Slice’s automated underwriting rules are agreed upon by Munich Re.