Insurance President: - Self-driving cars exhibited 92% less pedestrian injuries than private cars

The Rising Cost of Mobility Insurance

Insurance may not be the sexiest topic in mobility, but it is one of the most important ones. For every mobility operator insurance is becoming an increasing part of their profit and loss statements, eating at their margins. Regulators are also concerned about insurance, getting a varied amount of input from different stakeholders. 

I spoke with Chris Moore, President of Apollo Ibott 1971, a Lloyds syndicate, to understand more about why insurance matters for shared mobility. 

Backstory of How Apollo Ibott Started Insuring Shared Mobility

Lars: How did you start insuring shared mobility? 

Chris: Our first account that I ever wrote in the sharing economy space was when an accommodation sharing platform approached us in 2014, that had a unique insurance challenge where they needed insurance for an asset agnostic marketplace. Once we created a solution there it opened up a whole industry of sharing economy companies looking for similar solutions, including Ride-Hailing and Micromobility!

Lars: So why is insurance so important? 

Chris: Tailored insurance for Mobility, can help create trust within the mobility eco-system, promote enhanced risk management and safety, whilst also providing financial stability and protection to companies enabling these new mobility services.  Done well, Insurers in partnership with mobility platforms can enable data driven risk decisions to unlock profitable and sustainable growth in markets.

Insurance regulation is becoming heavy-handed

Lars: Why? 

Chris: Well there are two trends that are worrying me. Let me start with the first one, which is regulation. In many markets the escooter is regulated as strict as the car or even stricter.

If I wanted to drive a car in America, regulation states that I need to carry between $30,000 and $100,000 in Insurance limits as a minimum depending on the State I am driving in. That’s it. That’s the minimum financial requirement to drive a car in the U.S. But in some Cities in the US, if you operate a scooter, they want people to have $100 million in coverage. 

Lars: That’s crazy! What are you seeing here in Europe? 

Chris: In an increasing amount of markets the escooter has to have motor insurance for example. Meaning that all liability has to be covered, uncapped, meaning any amount that an accident can amount to.  

Lars: Explain why that isn’t a good thing. 

Chris: It isn’t a good thing when it makes insurance so expensive that operators can’t afford to buy it. This can mean that the service can become unavailable in time. 

Lars: I had a client with this issue, a smaller operator that couldn’t afford escooter insurance in a smaller market with mandatory motor insurance. 

Chris: Exactly. The thing that makes uncapped insurance so expensive is that we have to insure for all possibilities, even if they haven’t happened. We’ve had very few serious accidents with escooters in Europe the past 7-8 years but when they happen they are exaggerated in the press and it creates fear and anxiety amongst users and regulators unnecessarily. 

Lars: A lot of politicians I speak to have the question - why should society bear the risk of instances like that? 

Chris: I believe that in principle bicycle, ebike and escooter rides should be insured correctly for the true risks they pose. Bicycles and E-bikes do not have the huge insurance burden that e-scoots have despite them being of similar weight etc.  It is the fear of the unknown that is driving high insurance requirements and I think we can all collaborate to make the regulation and insurance requirements more sustainable.

Lars: Good point. Tell me about the other concern you have. 

Insurance Litigation costs for Shared Mobility in the US are rising

Chris: The US is a very litigious environment. Tech companies and shared mobility providers, because of their large valuations and rapid growth, have become targets for lawsuits in a new wave of legal system abuse being deployed by the Plaintiff’s bar.

That’s really challenging for our clients. They wonder, “Why should I be liable for a rider who used our product in an unsafe way?” If I buy a car from a large Car Manufacturer and drive it recklessly, that’s not the Car Manufacturer’s fault. It's mine!

Lars: Is the plaintiff’s bar winning?

Chris: Not necessarily, but even when they don’t win, the defense costs can be significant. And shared mobility is built on trust. If there’s a perception of a large insurance gap or frequent injuries and losses, that can cause problems. Take Paris as an example. There were a few incidents, and when you compare the frequency of losses for e-scooters to other forms of transportation like cars or even ride-hailing, the loss cost per mile is vastly reduced for scooters.

Lars: So insurance is also a perception problem. 

Chris: Exactly. We have shared our loss statistics to people willing to listened and consider, but we still see insurance requirements that are not fit for purpose across lots of areas of mobility around the Globe.

Lars: Where do you see things heading next?

Autonomous Vehicle Insurance and Ride-hail

Chris: I think the next big thing in new mobility is autonomy. I think it’s going to face the same challenges that shared mobility, e-scooters, and ride-hailing have faced. The public can sympathize with a human driver who makes a mistake, but they won’t sympathize with machines or artificial intelligence. Because of that, insurance costs, potential claims, and litigation costs could be even higher. 

Lars: If the same incident happened with a human driver, no one would even notice.

Chris: Exactly. It’s purely due to public perception. No system can have a zero percent loss frequency, it’s impossible. At some point, there will always be an incident. Unless we change the way we perceive these things, we’ll never see autonomy reach its potential. The number of lives that could be saved with autonomous vehicles versus human drivers is undeniable, yet people are afraid of it.

Lars: Tell me more! 

Chris: That’s what I see as the core of all this. Whether we’re working with regulators, clients, or insurers, it all comes down to education and sharing data. Waymo release a lot of public reports with some fascinating data.  Some data points that I like to reference is - As of January this year, Waymo vehicles, exhibited 92% fewer pedestrian injuries, 82% fewer cyclist injuries, 82% fewer motorcyclist injuries, and 96% fewer vehicle‑to‑vehicle intersection crashes when compared to human drivers.

Lars: How do you help companies reduce premium and claims costs? 

Chris: In delivery and ride-hailing, we have huge amounts of loss data. It comes down to how well you manage your claims. When you have an independent contractor driver base for example, the quality of those drivers and how you interact with them matters a lot. We know that in any form of motor insurance, factors like age and experience are critical. Time of day also plays a big role—nighttime driving is riskier than daytime driving.

When companies use telematics to track how people are driving, it helps educate drivers, score them, and provide feedback. That improves their behavior and reduces loss costs.

Lars: With all this risk, why are you in these markets? I know several insurers that don’t dare to touch this new form of risk. Some Norwegian insurers overpriced their premium and then lost the industry entirely to the French. 

Chris: There’s definitely a first-mover advantage for insurers willing to enter these new markets. But if you’re not constantly evolving your model and learning from your clients, by the time competition comes in, you’ll be on version 1 while they’re on version 3.

I always tell risk management buyers that you can immediately tell which insurers want to be long-term partners based on how much interaction they seek with you. If an insurer says, “Here’s your price, we’ll check back in 12 months,” you know they’re not looking for a partnership.

Why they are called Apollo1971

Lars: Well let’s see how they’re doing in 10 years. I’ve always wondered, what’s the story behind the name Apollo?

Chris: Our original investor was Neil Armstrong, the first man on the moon. That’s why we’re called Apollo. The original syndicate we launched was in 1969, the year Neil first walked on the moon. Apollo1971 is our new mobility business, named after the year they first drove the lunar rover on the moon. So, 1971 was the year of the first new mobility on the moon, and we thought that was a cool connection. 

Lars: Indeed it is.