Telematics: reframing risk for sharing economy

With the rise of on-demand mobility services, and the sharing and gig economies, insurers are questioning how to adjust pricing risk for the changing transportation sector. To break down how these new categories impact risk exposure, it’s crucial to determine who today’s drivers are, why they drive, and what their relationship to their vehicle is.

At Arity, we’re using our risk expertise to address this insurance industry disruption. As more personal policyholders drive for commercial shared economy companies, we’re examining how the intersection between personal and commercial coverages is changing.

We are actively working to enable insurers to meet this need. What’s clear so far is that each type of mobility model represents a distinct risk profile. A rideshare driver is going to drive differently than a peer-to-peer day-tripper or a car-subscription car-flipper. So, our job is to understand the behavioral differences between each type of vehicle-driver relationship.

Fortunately, insurers are already guiding the sharing economy on how they can leverage risk-based pricing for business outcomes. Arity is further facilitating this relationship, offering both carriers and sharing economy companies access to telematics-based scores that help communicate and control risk. We’re opening up this data because we believe that helping insurance providers and sharing economy companies speak the same language of risk is key to improving personal transportation over time.

We collaborate across the industry with this mission in mind. We need to foster transparency and garner support from the entire transportation ecosystem to successfully shift how insurance products work. When we reframe how risk is defined, we’ll be able to understand and insure varied and dynamic types of risk, whether it’s usage-based, mileage-based or possibly even motivation-based.