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By Leslie Scism
Chubb Ltd. has teamed with a technology startup to sell insurance to passengers of ride-hailing services like Uber Technologies Inc. to cover medical and other costs in the event of an accident.
The startup, Sure Inc., has developed a product for passengers to purchase accident and death coverage on an on-demand, per-day basis via a smartphone application. It covers costs of injuries sustained when traveling in a ride-sharing vehicle.
One of the world's biggest property-casualty insurers, Chubb is part of an industrywide race to develop new products as the car industry goes through a monumental shift. Ride-hailing services continue to rise in popularity, while growth in autonomous vehicles will shift driving from humans to computers.
Both trends threaten to cut into one of the industry's biggest product lines in the U.S.: car insurance bought by individuals. These policies are estimated to deliver $220 billion in premiums in 2018, according to trade group Insurance Information Institute.
Chubb will underwrite Sure's ride-sharing policies, which will pay up to $10,000 in medical costs per accident and include a $100,000 death benefit, the firms said. It costs $2.40 for a 24-hour period.
In the U.S., passengers typically are covered by liability insurance provided by a ride-sharing firm itself. For example, Uber provides a total of $1 million of coverage per accident, according to its website. Uber's insurance program typically includes claims for medical expenses and loss of income, and it kicks in regardless of whether an Uber driver or an uninsured other motorist caused the accident, according to the firm.
"Since 2013, Uber has made insurance available at no added cost to riders," Gus Fuldner, an Uber executive, said in an email. "Our built-in $1 million liability and uninsured/underinsured motorist coverage provides peace of mind and protection from unforeseen events."
Still, said Wayne Slavin, founder and CEO of Sure, which is based in Los Angeles and New York City, said his firm's new coverage, called RideSafe, is aimed at filling any potential gaps in such insurance payments to riders.
Proceeds from RideSafe policies also could be used by buyers to cover deductibles on their health-insurance policies, in the event of a costly accident in which the passenger is drawing on a health-insurance program, Mr. Slavin said.
The move from Chubb is one of many by insurers to ramp up innovation as many consultants predict evaporation of a big chunk of car-insurance premiums in coming decades, assuming breakthroughs in driverless technology that could lead to sharp reductions in wrecks.
While that could take decades, the landscape already is changing as ride-sharing networks grab more business. Taxis and ride-sharing vehicles could account for about a quarter of miles traveled globally in a little over a decade, some analysts estimate.
"There are many people, carriers and insurtech startups thinking of the implications of the ride-hailing world, the potential for gaps in insurance coverage and the opportunity to offer innovative new products, " said Michael Halsband, a partner at law firm Drinker Biddle & Reath LLP, whose focus includes insurance-industry mergers and acquisitions as well as insurance-technology startups.
For carriers, these early products provide opportunities to collect data about how the personal-transportation world is evolving, Mr. Halsband said.
The ride-hailing offering with Sure reinforces "our commitment to supporting efforts around digital transformation and providing consumers with peace of mind in emerging markets," said James Walloga, a senior executive at Chubb North America.
The product launch follows an announcement in December that Waymo LLC, the driverless-car unit of Google parent Alphabet Inc., has teamed with California technology startup Trov Inc. to cover future passengers for lost and damaged property and for injuries.
Waymo and auto makers like General Motors Co. are seeking to put commercial fleets of autonomous vehicles on public roads. The coverage would automatically be provided by Waymo, not sold separately to passengers as Sure is doing. Trov policies would be underwritten by a unit of reinsurer Munich Re.
Sure, which already provides insurance products such as smartphone protection, said future iterations of RideSafe would include coverage for passengers riding in autonomous ride-sharing fleets. Sure also is aiming for coverage on a per-ride basis.
Write to Leslie Scism at email@example.com
(END) Dow Jones Newswires
June 14, 2018 18:49 ET (22:49 GMT)
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