For example, take the gig economy in transportations. With all the on-demand services that many of us have made great use of. We’ve had almost endless cab alternatives to get an easily accessible and cost-efficient ride, with such as Uber, Lyft, and so on. Now, these services have been hit hard by the novel coronavirus pandemic. Some say that the riding volume has dropped by as much as 60%-70% in general in recent days. Unluckily, the cost of the cars has not followed the same downward curve and remains the same for the drivers. Doing simple math, one can easily understand how economically unsustainable this is. If a car stands still for the majority of the day, should one pay as much insurance cost as if the vehicle was out running in the traffic? Of course not.
The same applies to private motorists. Despite some of us barely utilizing the car we own, we have nevertheless been accustomed to paying full insurance premium per month. Regardless, if we drive just a few miles or 100 miles a month, this has been since ever – until most recently. New digital technologies enable new options. Today, some insurance carriers are testing off connected UBI (usage-based Insurances). In most cases, a win-win for both the policyholder and the policy provider.
We know the demand for personalized and connected insurance offerings taps on the door for many reasons, and we’re standing at the brink of this change. By speeding up and backing car owners and professional drivers now in their urgent need for variable cost, insurances couldn’t possibly feel more immediate and needed as it does in this particular moment.