According to Capgemini, insurance for increasingly connected, autonomous, shared, and electric (or CASE) vehicles will increase eightfold by 2030—reaching 40% of total carrier volume. But today, only 29% of insurers say they can develop products that adapt to new forms of mobility.

In part one of this two-part series, I examine why carriers seeking to remain competitive in a changing mobility landscape must leverage the same technologies that are transforming the market to innovate for exciting new opportunities in commercial lines. They’ll also need to do this while navigating an era when advances in—and market adoption of—CASE technologies don’t necessarily progress at the same rate. The question is: how?

Embracing existing connected car technologies that enable embedded distribution and usage-based insurance (UBI) is just the beginning. From here, carriers must put ecosystem and infrastructure strategies in place that enable them to rapidly innovate whole new forms of insurance coverage aligned to technological advances and market adoption. This is especially true as new generations of autonomous vehicle (AV) and electric vehicle (EV) technologies emerge and evolve in fits and starts. For carriers, it’ll be no small feat. But the rewards could be enormous.

Commercial Fleets: Smart Wheels, Seismic Changes

Over the next decade, look for autonomous technology to evolve and integrate into personal vehicles, public transit, and the transportation of goods worldwide. By 2030, nearly 70% of all new passenger vehicles will include Level 2 (partial autonomy), Level 3 (conditional autonomy) or an even higher level of autonomy, according to ABI Research. Entire fleets of Level 3 and even higher-autonomy Level 4 commercial vehicles will become commonplace.

These technologies will do more than just navigate. They’ll also enable the shift of the burden of liability from the human driver to the commercial party associated with the autonomous vehicle technology and capabilities—often the OEM or autonomous vehicle software provider. This will also create a market for insurers as billions in revenue shifts from personal lines to commercial lines coverage. According to McKinsey, that could be as much as $5 billion per year by decade’s end.

Meanwhile, robotaxis like Google-backed Waymo, GM-backed Cruise, and Tesla’s yet-to-be-named robo-offering will work through their own current setbacks and set the stage for new forms of autonomy. Vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I), and vehicle-to-cloud (V2C) technologies work to solve many of mobility’s most substantive pain points. This includes road congestion, parking hassles, pollution, and more—with plenty for insurers to cover. Meanwhile, Internet-of-Things (IoT) technologies also enable whole new commercial coverage models—including the use of telematic sensors to monitor the temperature and spoilage of transported goods.

Driving, Disrupted: Ditching Personal Vehicles Altogether

These aren’t the only changes just around the corner. By 2050, 70% of consumers worldwide will reside in cities. A growing number of them will forgo car ownership entirely. Despite recent improvements, sales of personal vehicles in the US and Europe have drifted downward since 2016. At the same time, ride sharing services are expected to grow 18.5% per year worldwide through 2032. As these trends continue, the impact on carriers will be profound.

KPMG estimates that by 2040, just 40% of overall auto premiums will be generated through personal lines worldwide. Much of that will require some of the new forms of distribution, products, pricing, and services I’ve discussed here and in part one. Thanks to improved safety and a dramatic reduction in personal miles traveled, as much as $160 billion in current personal lines premiums will evaporate, even as commercial lines mobility revenues trend upward. While this won’t necessarily mean the end of the road for personal lines auto, it may feel like it.

It’s increasingly clear that new commercial lines opportunities can more than fill the cavernous gap being created by the ongoing erosion of personal lines auto revenues. But given the uneven pace of new advances and market adoption, it’s also clear that success won’t be predicated solely on deploying compelling new CASE-based solutions that address the needs we recognize today. It’ll also hinge on the ability to quickly innovate new lines that address new needs and coverage gaps as quickly as they emerge.

Innovating Multimodal Commercial Lines

In this rapidly evolving landscape, for instance, insurers must innovate to support a shift to multimodal coverage models that toggle between personal and commercial auto insurance as liability moves between the driver and the commercial manufacturer or other party, depending on usage, at the swipe of a finger.

They’ll also need to embrace new forms of coverage for new subscription or peer-to-peer car rental services like Getaround and Sixt, and micro-mobility startups with rapidly growing fleets of e-bikes, e-scooters, quadracycles, and yes, even golf carts run by companies with names like Bird, GoTrax, and Joyride.

In the past year, we’ve seen states make moves to mandate insurance coverage for micro-mobility services. In regions without such requirements, it remains to be seen if individual customers opt for micro-mobility coverage in the same way they might for a rental car. But DoorDash, Amazon, and other companies using micro-mobility for deliveries may be a different matter.

So might be coverage for the fleet operator. Over the past year, “rebalancing” has emerged as a surprising, net-new form of commercial lines coverage in its own right. As fleets of scooters and e-bikes get scattered around a city, it’s up to the operator to collect and place those vehicles back in high-traffic areas where they can attract further rides. The fleet of vehicles used to continuously conduct this rebalancing must be adequately insured to navigate city streets.

It’ll also mean developing new “Mobility-as-a-Service” (MaaS) offerings that cover all aspects of mobility journeys across public and private transport instead of just the vehicles used. Whether for personal, commercial, or hybrid use, these models might include coverage for policyholders’ use of their personal, subscribed, or on-demand car ride to the train station as part of their morning commute (collision, injury, personal property). The train ride into the city (personal or commercial loss, physical injury). The e-bike ride from the train station to the office. The robotaxi ride for that afternoon meeting with vendors. And the late-night rideshare all the way home after a client dinner.

From Helsinki to Singapore, MaaS platforms provide integrated, seamless mobility experiences, transactions, and, in some cases even insurance coverage, across public and private transport. By 2032, the market for MaaS and other forms of shared mobility will be $1.8 trillion worldwide. And according to Capgemini, 42% of policyholders worldwide already want a single policy that covers them irrespective of mode of transportation. Yet only 33% of insurers currently offer one.

According to Timothy Papandreou, founder and CEO of Emerging Transport Advisors and a global thought leader on mobility, that will change, with MaaS becoming a consequential part of the insurance industry.

“I call it the Grand Symphony of Urban Life,” he told me in a recent episode of my InsurTalk podcast, adding, “We’re talking about insurance policies that cover the entire journey, end to end. So it’s not just about the car parked in the garage, it’s about how you use different modes of transport throughout the day.”

In Timothy’s eyes, MaaS is a gateway to whole new types of coverage. “We’re going to have Lifestyle-as-a-Service. Whether we own things or services, they should all come under one insurance system that is basically you, and it doesn’t matter whether you are going to sleep and lying in a bed, or you’re going to make something, or you’re going to ride or drive something. The insurance should always be there, tailored to your needs.”

5 Keys to Mastering the Future of Mobility

To navigate the rapidly changing mobility landscape, carriers must take proactive steps to innovate and adapt. Here are five key steps to getting started:

• Invest in Next-Gen Data and Analytics: For insurers, the future of mobility is about leveraging vast amounts of real-time driving and traffic data from a rapidly expanding universe of sources. In addition to data from onboard systems and smartphone apps, carriers will also need ecosystems to draw and utilize data from public and private transportation systems. In the event of claim-triggering events, they’ll also need the ability to leverage data from nearby camera feeds, IoT sensors, radar, Lidar, and more to simplify, streamline, and automate the claims journey.

• Harness an Intelligent Insurance Platform: Data and the ability to make it actionable will require a modern, cloud-based infrastructure like the Guidewire platform. Prioritize providers that combine core, data, and digital using powerful forms of artificial intelligence—AI-based orchestration engines, if you will—that integrate real-time data across mobility ecosystems (OEMs, third-party data and service providers, etc.). This is required to interpret exponential amounts of data and support all the transactions within, from quote to claim and beyond.

• Forge Strategic Partnerships: Collaborate with OEMs, technology providers, and mobility startups to access critical vehicle data and co-develop innovative insurance solutions. Also stay informed about regulatory developments related to autonomous vehicles, connected cars, and data privacy. Engage with regulators to shape policies that support the adoption of, and coverage for, new mobility technologies.

• Innovate New CASE-Centric Lines: Develop fitted product lines tailored to embedded distribution channels, usage-based offerings, coverage for autonomous vehicles, and so on. Tap AI to conduct claims analysis that identifies opportunities for new lines or potential enhancements to existing ones. And explore opportunities to offer Mobility-as-a-Service policies that span multiple modes of transportation in real time.

• Enhance the Customer Experience: Leverage applications to provide seamless and personalized customer experiences across the insurance value chain. Harness telematics and connected vehicle data to further shift insurance from a repair-and-replace to a predict-and-prevent business by offering proactive safety alerts and driving tips that help to boost loyalty and reduce exposures.

Carriers with this kind of platform infrastructure and proper data ecosystems will have a marked advantage in pioneering lucrative new commercial lines opportunities—both the ones we know about today, and those yet to emerge as mobility continues to evolve.