Insurance Markets in Flux: How Technology is Reshaping the Insurance Industry

Ed Walker, Vice President, Shared Economy & Mobility, Hub International joined Grayson Brulte on The Road to Autonomy podcast to discuss how technology and autonomous vehicles are reshaping the insurance industry.

The conversation begins with Ed discussing the current state of insurance markets for the gig economy.

The current environment is a really broad spectrum of winners and losers.

– Ed Walker

The current environment is having an impact on the consumer as the average auto insurance liability rate has increased of 10% over the last year. This increase is on top of the industry average of 10% all claims filled in 2022 were fraudulent across all the insurance markets.

There are more people on the roads without insurance then there has ever been right now in the United States. Underinsured and uninsured motorist coverage which is not provided in every State has become what used to be a consideration on a renewal to an absolute requirement in my opinion.

– Ed Walker

While in Ed’s opinion this an absolute requirement, we are starting to see the trend of bring your own insurance for gig economy workers and individuals who subscribe to a vehicle subscription service. In some cases, these individuals are not properly insured which could potentially have negative ramifications on them personally.

When you have a bring your own insurance model, what you have is a subscription model where the car is not owned by the customer. However that customer is going to a personal limes agent or a program in order to get the vehicle insured.

– Ed Walker

The insurance they purchase might not be perfect, but in their minds it’s still insurance and it allows them to drive the vehicle. For those individuals who drive as for a service such as Uber, Lyft, Uber Eats and DoorDash a large portion of their take-home pay goes to insurance premiums.

The insurance is costing your operation anywhere between 10 to 40 cents per mile depending on [The] State and the carrier.

– Ed Walker

With gig economy drivers getting squeezed with rising costs due to inflation and tight insurance markets, the question becomes how long is this model sustainable in it’s current form. The economics of the model today are opening the door to a future where ride-sharing services will be primarily operated with autonomous vehicles.

I see autonomous vehicles as our ultimate light at the end of the tunnel if these situations do not improve.

– Ed Walker

The autonomous vehicle and autonomous truck markets are rapidly evolving as companies scale operations across the United States. As these companies scale their operations, the insurance market underwriting operations will continue to evolve.

The more we do it, the better, smarter we get at it. The more carriers can make money at it, the more carriers show up, the more competitive the market gets.

– Ed Walker

Wrapping up the conversation, Ed shares his thoughts on the future of insurance.