I recently wrote about the 3 Pillars of On-Demand Insurance in Insurance Thought Leadership, positing that modern approaches to data, product, and systems are converging to make continuous underwriting, microinsurance, and gig-economy insurance newly viable for the marketplace. The InsureTech SURE is rolling out a new insurance product, underwritten by Chubb, that provides one-day ride-share coverage. This is a great example of those three pillars in action!
The concept of RideSafe isn’t that much different from a standard travel insurance product, except for its focus on ride share services like Uber and Lyft, making it an especially micro-sized form of it. And the need for such a product isn’t necessarily a new thing: people have been taking city cabs and private car services and riding public transportation for a long time with a similar set of risks. So what makes this a viable product now?
First and foremost is the availability of data. The difference between riding with Uber and Lyft compared to cabs, buses, and car services is the mobile app and the connected network of information. It’s possible for an insurer to know precisely when a policyholder is on a commercial ride. But this is also about a rethinking of product, looking for ways to match a specific consumer need rather than how to sell a risk solution. It remains to be seen whether people will want this type of policy, and it’s quite possible it will not capture any significant premium dollars, but such is the nature of how startups look for ways to disrupt the traditional marketplace. One thing most startups don’t have to worry about that incumbent insurers do is a large legacy system debt, and we can assume that SURE’s systems are modern and flexible enough to service this particular on-demand product.
Just because it’s possible to envision an on-demand insurance product doesn’t mean consumers will prefer that approach over broader policy types that cover an umbrella of risks. However, with newly available data, a rethinking of consumer product, and modern systems that can support micro-transactions, there’s a new place for on-demand insurance in the marketplace that wasn’t technically or stucturally possible before.
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