" class="no-js "lang="en-US"> EXCLUSIVE: "A Thoroughly Modern Mobility" - Sonia Flynn, Zego in 'The Fintech Magazine'
Wednesday, December 07, 2022

EXCLUSIVE: “A Thoroughly Modern Mobility” – Sonia Flynn, Zego in ‘The Fintech Magazine’

Zego, the UK’s first insurtech unicorn, took the road less travelled when it started offering usage-based vehicle insurance to gig workers. The market’s getting busier, but it’s still out in front – and plans to stay there, says COO Sonia Flynn

In his futurist envisioning of the year 2040, CEO of insurer Zego, Sten Saar, laid out how the choices we make to get from A to B will affect the world we will live in. From autonomous single-person electric vehicles to self-driving vans with no human operators that deliver everything from our Amazon order to our lunch, movement will become more efficient and focussed around the individual, improving both sustainability and personal mobility. Cities will be greener, calmer, quieter and safer.

So how will that affect vehicle insurers?

For those that don’t start shapeshifting now, it could mean their complete irrelevance. But, since 2016, Zego has been on a mission to disrupt the commercial motor insurance industry with flexible policies available from one hour to one year, in preparation for just such a future.

Initially built around the growing UK gig economy of drivers and riders, it now protects 400,000 vehicles in nine countries and is available to anyone who earns a living by keeping things on the move, be that the driver of an Uber or a business managing a fleet of diesel trucks or, more likely, e-scooters.

Part of the economy of the Internet of Things, Zego collects 50 data points per second on its insureds, and currently bases its ultra-competitive, pay-for-what-you-use policies on what Saar claims is five times the amount of information per vehicle that rivals who use demographic risk profiles alone, or combined with telematics, amass Zego uses all those data inputs and working habits data, too. That’s the input.

The output is usage-based cover, bespoke to the professional driver/rider, or attached to a vehicle in a fleet. Importantly, by reflecting that data back at the policyholder, the person who pays the premium can directly influence the price by altering the driver behaviour and/or usage, bringing down the cost to them and the environment.

From Asia Pacific to the Middle East and North Africa, adoption of usage-based insurance (UBI) has been growing. And a UBI report released earlier this year by By Bits found that the average retention rate for such policies was five years, considerably higher than for traditional insurance products.

“Data-led telematics is making waves in the insurance market, particularly among fleets that are looking to reduce costs and regain control of their insurance policies. Being able to influence your insurance costs, whether you’re an individual or manager of drivers, is here to stay,” says Sonia Flynn, chief operating officer at Zego.

It was the first UK insurtech to reach unicorn status, a year after the COVID outbreak had forced many to rethink their transport choices. Another year on, and a cost of living crisis in the UK has led 78 per cent of drivers taking part in one lender’s survey to conclude that car ownership is unaffordable. The poll of nearly 2,000 people carried out for Go Car Credit, revealed that half of them were leaving the car at home more often in a bid to save money.

Meanwhile, sixty-two per cent of drivers are thinking they’ll drive less in the next five years, according to By Bits. That, combined with the sudden growth in the mobility-as-a-service (MaaS) industry as the market shifts towards on-demand access to both public and private transport networks and multiple modes of transport, would possibly indicate that Zego’s product strategy is spot on.

Its fleet offering includes micro-mobility cover for businesses that manage e-bikes and e-scooters with fixed and flexi insurance plans, giving business owners the choice of paying by the vehicle or by the minute Customers already include many of the leading e-mobility providers, such as Zipp Mobility UK, Tier and Pony.

“What the 2040 Vision highlights for us is how these things will play out in the medium-to-longer term, and that we need to be thinking about that when we consider the choices we make now as a business,” continues Flynn. “We’re always thinking about what the best thing to do is now, and how we can set ourselves up as a business and be relevant in what we offer to our customers in the future.”

The insurer’s long-term thinking extends not just to how far it will go in creating new product offers, but to how far it will go to sell them as well. This January, it motored into the Netherlands, which it sees as a ‘living lab’ for product innovation. Despite being famously flat, the country is not nearly as advanced a mixed mobility market as the UK, with half the number of users of e-scooters, for example, projected by 2026.

So, it was important, says Flynn, that ‘when we opened in the Netherlands, we would find people to join our team who understood what the market would need, what our gaps were, and what areas we could amplify’ What will be of interest to fleet operators there as much as anywhere else, though, is figures from Zego that suggest aligning insurance premiums to driver behaviour can lead to a dramatic drop in road collisions and a potential reduction of up to 10 per cent in claims.

Speaking at the time of the Dutch launch, Saar commented: “Telematics and data science have proven that they can improve driving behaviour and, when combined with a financial incentive, the have great potential to make fleets safer and cheaper to run.

“Commercial vehicles now account for over 13 per cent of the vehicles on our roads, the highest proportion ever recorded, and this number is rising, as technology continues to decentralise our shopping and travel habits. For the people and businesses managing these fleets, flexibility and control are both highly sought-after, but driver behaviour remains a huge variable that is notoriously difficult to influence.”

Zego has been licensed to write its own insurance policies since 2019 and investment in underwriting and onboarding are key to ensuring its products are – and remain – fit for purpose, says Flynn. “When you enter into an agreement with the customer, whether an individual or fleet manager, it’s really important that everyone’s clear on what the agreement brings – so you always ask the right questions in advance and really assess what the business needs from an insurer.

“We want to build long-lasting relationships with our customers… to live up to the promise that we’ve entered into.

“To be really relevant in terms of what we offer in many, many years to come.”



This article was published in The Fintech Magazine #25, Page 93-94

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