Mobility provider cuts premiums and widens coverage with streamlined insurance program

Mobility is one of the fastest growing areas of the sharing economy, radically challenging traditional models and the way risk should be addressed and managed.

A ride share and last mile delivery company had an insurance program, but it was expensive, piecemeal, and had major gaps. As contractors, most drivers were not covered by the corporate policy, while some claims resulting from assaults and accidents had gone viral, threatening the company’s reputation.

At a time when the platform was expanding rapidly in the region, the insurance markets showed little appetite for the company’s business.

Working with Marsh, the company not only gained an insurance program with terms and conditions that better met its needs, but it saved 50% on premiums. The client also reduced the claims process from months to days, allowing it to achieve a leading value proposition for the drivers.

Designing a new affinity insurance program

To accomplish this, Marsh first conducted a comprehensive deep dive with the client to understand the company’s day-to-day operations and risk. In some countries, for instance, there was a request for non-traditional coverages, as several types of claims had the tendency to go viral on social media, leading to reputational risk for the company. Such claims clearly required a solution.

The client also requested an insurance product offering that would be valued by the drivers at an optimal cost. However, signing up carriers to cover the company’s risk type was challenging. Insurers showed little interest in providing personal accident cover, for example. This was largely because reconciling the client's operational model with the high loss ratios associated with public transportation in most in scope countries made understanding the exposure difficult for the insurers. The fact that drivers worked long hours exposing them to fatigue-related accidents was also a deterrent.

Getting insurers on board

To increase insurer appetite for the business, a number of strategies were implemented.

To get around the lack of historical claims data, analytical tools were used to provide an evaluation of the client’s future maximum exposure.
Dynamic pricing based on volumes, insured values, types of mobility and service, and loss performance were integrated into the program. This created a more transparent view of pricing so both insurers and the client could benefit from those insights.
Marsh also spent much time working with insurers and the client to make sure regulatory concerns were properly addressed and that the program was fully compliant.

Streamlining claims

Claims were a particularly sensitive component of the program that required coordination and responsiveness due to the severity and potential visibility of cases. A priority was to build a standardized service model that once implemented would guarantee the same level of assistance across the region, despite the differing insurers, regulatory frameworks, and maturity levels of markets. For claims that had the potential to impact the client's brand, Marsh introduced specific product features and assistance services to provide support for the client and its drivers.

Training sessions

As part of the service, Marsh regularly conducted face-to-face training sessions for the client’s operational teams to help prevent and reduce accidents, streamline claims reporting, and enhance the experience of service providers.

The results

The claims process is much improved, as a result of the new program devised by Marsh. Claims that took months to resolve and required the filing of many documents are now responded to in seven days, with the need for much less documentation.
Data-driven decision-making is becoming pivotal at the company. A data strategy built around the program allows the client to more effectively negotiate terms and conditions with insurers and provides an enhanced overview of its operations across the different geographies, resulting in a better understanding of operational risk.
The insurance cost is dynamically optimized — meaning premiums can reflect current loss conditions and the program’s cost is fully transparent. This enables the client to have better control over the financial performance of business units.
The program has expanded to different countries, maintaining a consistent service and guaranteeing that drivers are supported equally in each geography.

In the future, data could be used to predict and adapt a driver’s behavior and risk profile. This means different loss prevention, recruiting, and road recommendation strategies could be implemented, potentially, in real time.

* Although this case study took place in Latin America, Marsh provides support to clients facing similar challenges in the UK and various countries around the world. Please consult your local Marsh office on availability in your region.