COVID-19 lockdowns and an increase in working from home worldwide has limited the need to own private vehicles, which will cause more consumers to consider new models of vehicle ownership, says GlobalData, a leading data and analytics company. This has implications for the insurance industry. As more people turn to car-sharing schemes for their transportation needs, this will reduce the number of private motor insurance policies in force. In their place, insurers will need to provide short-term policies for drivers using these services.
GlobalData insurance analyst, Yasha Kuruvilla, commented: “The proportion of consumers using car-sharing schemes has been low over the past few years. In 2019, 5.9% of UK consumers used a car-sharing scheme, up by only 0.3 percentage points from 2017 according to GlobalData’s UK Insurance Consumer Surveys. However, the greater number of individuals working from home on a regular basis will reduce the need to own a private vehicle. This creates more opportunities for car-sharing firms like Zipcar and Turo to increase their customer base.”
Insurers that can partner with car-sharing companies to offer insurance at the time of booking will be much better placed to capitalize on the shift in consumer behavior.
Kuruvila continues: “This creates more opportunities for insurtechs – key players in the usage-based insurance space. This change in behavior will be concentrated in cities, where individuals are able to conduct their daily business without the use of a car and will only need one occasionally.
“However, car-sharing schemes will have hurdles to overcome. Customers must be confident that the cars are properly cleaned and sanitized after each use. And with the global community now more aware of health risks, vehicle owners may face increased premiums as insurers look to protect themselves from liability claims should someone contract an illness while using the service.”
Quotes provided by Yasha Kuruvilla Insurance Analyst at GlobalData
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