Ridesharing companies, like Uber and Lyft, are taking an increasing amount of trips from personally owned vehicles or existing mass transit. For insurers, that means a new vector of risk that can be underwritten.

According to new research from analyst firm Aite Group, Ridesharing: Opportunities for Insurers, usage-based insurance can solve many of the problems insurers face in trying to underwrite that risk.

For example, telematics technology can help identify exactly what a driver is doing at a given time. Some attempts at insuring ridesharing have involved writing language into personal insurance policies that exclude the time when drivers are logged into the application and waiting for a ride, then offering low-cost excess capacity coverage as an add-on to their policy for that time. If there is an accident then, as long as the driver has that product, they are covered.

But some insurers are using either their own telematics devices, or an integration with the ridesharing app, to identify when a driver is in that waiting period passively. Then, the insurer partners with one of the ridesharing companies to offer cover for that time period. (All ridesharing companies possess commercial insurance for the time of transit).

"Ridesharing is making the case for UBI more salient than ever," the report, written by Gwenn Bezard, says. "Thanks to the accelerometer and other data points, they know how fast drivers go and when they brake, and they can spot when an accident happens. With such data, [ridesharing companies] could improve the user experience, foster safe driving, and facilitate insurers’ ability to serve drivers."

Aite Group recommends that insurers use ridesharing as an "opportunity to advance their UBI offering."

"Insurers should use ridesharing as ground zero to establish a business unit dedicated to addressing insurance opportunities at the intersection of personal and commercial insurance," Bezard writes. At the same time, though, the company says that ridesharing providers "need to make it easier for multiple insurance companies to support their drivers with a UBI solution, without having to do one deal at a time with individual insurers"

That's because the current model depends on specific insurers partnering with specific ride-sharing companies to exchange data. That opens up a further opportunity for vendors in the space, Aite says.

"The current solutions are not designed to make it easy for drivers to work with different platforms," the report states. "We believe there is an opportunity for a technology vendor to provide a platform enabling insurers to provide a UBI solution working across all TNCs of the driver’s choice."

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