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Will mobility change the future

Posted: 21 July 2021
business resilience infographic

Urbanisation has caused a shift towards inter-urban travel. People’s mindsets are changing to see travel as a service because of the ever increasing options to choose, whether that’s a car, train or bike. 

The pandemic has certainly emphasised the ‘travel as service’ notion, and people are taking less mass transportation methods and are using private vehicles more.

The concept of classical ownership is being redefined as people start to think differently about ownership and travel becomes more about sharing. 

In the future, less people will want to buy and own a car, but instead want the flexibility to drive as and when needed. The pandemic has accelerated this as travel has reduced with more people working from home.

There’s a greater awareness of the environmental impact from transport, meaning people are re-thinking how they travel. In particular, younger generations and the more environmentally aware members of society are seeing the benefits of e-mobility. This will lead to more use of electrified vehicles or transport. 

There isn’t currently the infrastructure to encourage the use of electric vehicles. Not everyone can charge at home, especially if you have on-street parking or if you live in a flat. 

Some brands are already tackling this issue, but there needs to be a significant ramp up in the amount of infrastructure available. For example, having charging locations in public areas like shopping areas or parking garages would make electric vehicles more accessible for many.

Paying to charge your electric car isn’t simple. At the moment you need seven different cards and 10 different apps and even then people are paying different rates or being pre-charged. There’s no consistent or easy to use options available. 

It’s expected that when infrastructure in the UK catches up in terms of hardware, the clarity of payment options and the usability rates should improve. 

Big names in the major parcel and post companies around the UK, Europe and the US are looking at electrified vehicles as part of their future solution. There’s already been commitments to hundreds of thousands of vehicles.

This demand for electrified fleets is extending into medium duty lorries which is going to be another big growth driver, especially in urban environments where safety regulations are going to dictate road emissions. 

Keeping up-to-date with developments is important for brokers because electrified vehicles may provide a greener and more cost effective solution for clients with motor fleet businesses.

Electric vehicle batteries haven’t been perfected yet. The cost of batteries are high and there’s uncertainty around the distance a vehicle can travel before needing to charge. This lack of dependability is one of the main barriers to electric vehicle adoption at the moment. 

But it’s expected that as demand increases for electric vehicles this should cause the prices of batteries to come down and make them more affordable. 

It’s been predicted that software or fleet management providers can have the potential to offer their clients cost saving advice based on the data gathered through their electric vehicles. For example, data related to health monitoring, safety and security can be gathered and analysed to find cost-saving improvements. 

This will also provide the opportunity to gather usage-based data for understanding appropriate insurance cover needed too.

The introduction of more electric vehicles could introduce new insurance products that rely on a usage-based payment approach. This would mean insurance was being priced per minute or per trip rather than on an annual basis.  

This might especially benefit micro-mobility as it may allow greater flexibility for users and provide a solution for the urban lifestyle they want to live.

Listen to our e-mobility episode of our Insurance Tomorrow podcast. Our host Steph McGovern is joined by Michael Maicher, Global Partner & Director at Allianz Partners expert from Allianz Partners, as well as industry experts from Thatcham Research and McKinsey & Company.

You can also find the episode on your usual podcast app
Commentary and guidance in this article are provided for information purposes only and are not intended to amount to advice on which reliance should be placed.  Readers should seek further advice when dealing with their individual and particular situations. Allianz Insurance plc shall have no liability for any action taken as a result of and in reliance on the information contained in this article.