Insights on emerging risks and mobility


On March 4th, Alchemy Crew hosted a Virtual Transition Economy event with experts and industry leaders from the finance, tech, and insurance sectors. Attendees gave presentations and took part in lively discussions covering four core topics: Sustainability, Mobility and Emerging Risks, Health and Wellness, and Operational Resilience.

Today, we’re going to break down some of the most enlightening contributions made during our Mobility and Emerging Risks session which was led by a dear market colleague and friend of the Crew, Manjit Rana. Numerous trends, opportunities, and risks were highlighted over the course of the day, with conversations covering everything from changing consumer behavior to open-ended discussions on health tech.

Below, we’ve picked out four highlights and shared the key takeaways from a mobility strategy exercise. Many of the discussion points led on from research we’ve already shared in our piece entitled Shaping an electric and autonomous future, so check that out if you haven’t already.

There’s more to disruptive actors than better tech

As we learned early on in our Mobility and Emerging Risks session, virtually every industry is currently in a state of disruption or has been disrupted in the recent past. Normally, that disruption comes from external actors — think of Tesla’s impact on the Automotive space or the way that Netflix has rapidly reshaped the entertainment industry with products and services customers want.

Many observers assume that the implementation of new technology is the key differentiator between established players in these industries and disruptive organizations. However, that’s not all there is to the story. 

Take for example the difference between challenger and established banks, with the newcomer Starling Bank (founded 2014), you can open a new account within a couple of days and deposit funds within minutes. The same process can take weeks at an established institution and during Covid19 impossible to achieve under a three-month period. Although technology is certainly a factor here, it’s not sufficient to explain the disparity in customer experience. Entrenched processes and a lack of agility can make dominant institutions particularly vulnerable to disruption.

Covid-19 has introduced a diverse range of risks for insurers

The interaction between the insurance industry and the global pandemic has been nothing if not heterogeneous. To be sure, each and every sector has felt the impact of Covid-19, but no two insurance segments have responded in the same way — some insurance products are in more demand than ever due to the pandemic while others have become a deadweight for providers.

A prime example of an insurance product impacted by changing consumer behavior during Covid-19 is pet insurance. Pet adoption grew significantly over the course of the pandemic, causing the average price of puppies to shoot up. There’s a growing suspicion that this has led to widespread fraudulent claims being made for missing pets by policyholders. 

At the other end of the spectrum, home insurance policies are paying out less frequently than before the pandemic as potential claim generators — water leaks, for example — are being detected and dealt with early on as travel restrictions mean homes are almost always occupied. 

New attitudes to ownership could have major impacts on insurers

Consumer behaviour has changed dramatically due to the conditions imposed by Covid-19. Digital adoption has become far more widespread — video calls are replacing face-to-face visits, eCommerce compensates for a lack of access to physical stores, and telemedicine appointments are standing in for in-person healthcare visits. 

Perhaps most pertinent for insurers is the fact that consumers are also rethinking their relationships with the products they own. Over the past year, many car owners have found themselves wondering whether it makes sense to maintain a vehicle that sits unused for the vast majority of its lifetime.

Soon, on-demand leasing, ride-sharing apps, and joint-usage agreements could replace the traditional model of ownership when it comes to automotive transport. What’s more, this change may come suddenly as younger consumers, who harbor a fresh set of preconceptions about mobility, become old enough to drive. In response, automotive insurers will need to carefully rethink their services and target market. For traditional B2C providers, one potential solution is to pivot to a B2B approach and begin selling policies to fleet-owners and ride apps rather than individual drivers.

How should traditional insurers respond to market invasion from big tech?

Several big tech firms now dominate multiple industries (e.g. Google is the powerbroker of online search, video distribution, and advertising). Insurers need to think seriously about how to respond if major tech player(s) decide to enter the insurance space and come to dominate it by packaging policies with their core products. 

Experts who took part in the Alchemy Crew Mobility and Emerging Risks event felt that, in this eventuality, contemporary insurers could fall back on their capacity to process enormous volumes of transactions quickly. Besides competing directly, traditional insurers could become the service providers for next-gen insurtech organizations.

Of course, in the future, insurers may have bigger problems to worry about than market penetration from big tech. In a few decades, consumers may place greater value on digital rather than physical assets and could be less focused on maintaining ownership of the products they use. Taken to an extreme, this might mean that existing insurance models are already obsolete by the time that big tech enters the space.

Mobility as a Service (MaaS) — lessons from a hypothetical case study

Besides discussing the insights above, participants in our emerging risks session tackled a fascinating made-up scenario — if Amazon acquired BMW and wanted to pool the two company’s resources in order to disrupt the mobility and insurance space, how should they best go about doing that?

To start with, attendees looked at what the target market for the new joint business venture would be. The consensus view was that, given the scale of the companies and the universal nature of mobility, Amazon shouldn’t focus on any specific demographic or market. Instead, it should think of BMW’s automotive infrastructure and technology as a shortcut to developing transport solutions that work for both people and goods.

What would that kind of integrated solution look like in practice? One answer is that, in a future Amazon-backed Uber-style service, riders might pay less for rides shared with parcels that have been loaded for deliveries along the same route. This kind of multi-purpose mobility product would enable fewer vehicles to be on the road at once. 

When the panel was asked to consider what core challenges the acquisition could solve, one line of thought related to the issue of duplicate deliveries. The growth of Amazon and the eCommerce sector over the course of the pandemic has led to a significant proportion of households receiving multiple deliveries each day. With smarter, interconnected BMW fleets, could Amazon not simplify delivery routes and mobility challenges simultaneously?

Another focus of the exercise surrounded how much importance Amazon should attach to BMW’s status as a luxury brand when positioning the automaker within its ecosystem. Here, participants felt that this factor could morph over time — even though older generations might attach great importance to BMW’s status, younger customers are likely to prioritize convenience and access to the most appropriate form of transport over brand loyalty. 

Next steps

First, many thanks to those who attended the Alchemy Crew Mobility and Emerging Risks discussion, the conversation was lively and interactive, leading to some excellent conclusions about a rapidly morphing nexus of industries. The delegates got it. They started with understanding the market segment(s) they were going after and engaged in back-of-the-envelope market estimates. Still more needed to be considered in terms of platform design and ecosystem building. But a great opportunity to get everyone to engage in a “what next” discussion. 


Whether or not you attended, it’d be great to hear your thoughts on the takeaways above — please send us an email or leave a comment below.

You can discover more on the results of the event below…

Emerging Risks:

Sustainability and Climate Change

Transitioning to the new economy

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Post photo by JavyGo on Unsplash

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