Aon: Supporting mobility pioneers on their growth journey

Aon: Supporting mobility pioneers on their growth journey

As MOVE 2023 approaches, Aon – a leading insurance broker and risk management business, and a diamond sponsor of this year’s show – looks at the risks and challenges mobility businesses face and the innovative ways in which those risks can be managed and mitigated, while also using insurance capital to create additional value.

For the many mobility businesses represented at MOVE 2023, the story will be about fast-paced growth; the ability to go from start-up to a mature business that can rapidly scale in it chosen markets and locations. It’s an exciting journey but rarely one without risks and pitfalls, which is one reason why Aon is enthusiastically partnering many new mobility clients to help them safely navigate the challenges ahead. “We understand the journey mobility businesses are on,” says Herbert Jansse – Aon’s Head of Digital for EMEA, “and we want to be there for them whether it’s helping to provide insurance risk transfer products for the businesses themselves or their clients, advising on how to retain or recruit the best talent, how to leverage intellectual property to support debt financing, and even how to manage the changing regulatory requirements.”

 

An optimistic outlook
Despite the expected global downturn and difficult economic challenges, the outlook for the mobility sector is more encouraging given, for example, the expectation for growth of mobility platforms and solutions in Europe. “Densely populated cities in Europe continue to restrict conventionally fuelled cars from city centres and the expectation is that bike, scooter and moped sharing/rental will double or triple over the next three to five years,” says Jansse. “Add in the expected growth for other mobility solutions like the use of micro-cars and there is a lot to be optimistic about.” And it’s that wide-ranging nature of the sector which is so appealing, adds Marc Spurling, Aon’s Director of Future Mobility Strategy: “The way in which mobility trends are underpinning wider societal changes, reshaping cities, extending mobility access to the underserved, and encompassing the shared and digital economies, while supporting the transition to net zero is super exciting.”

A challenge, however, is in helping new businesses manage their risks when the focus is all about growth. “Insurance and risk should be high on the agenda, but it’s not always that way for start-ups and small businesses who are more focused on growth,” warns Jansse, even though the total cost of their insurance programmes can be very high. “We see digital native companies with an insurance spend that can be as much as 60-80% of their total expenses; meaning it has a high impact on them and their business model in terms of funding, and is an obstacle as they look to grow and expand into new territories,” says Spurling.

 

Working closely with insurers
In addition, new business models come with risks that the traditional insurance market might not have considered. “Many traditional insurance players struggle with some of the innovative areas that are a feature of the mobility sector,” says Spurling, “because there isn’t the historical data to enable them to underwrite these risks in the way they normally would. It’s a big challenge when it comes to setting premium levels and can lead to reduced insurer appetite for some of these risks, which in turn leads to higher prices. In the EV space, for example, the cost of insurance is higher which creates a problem for customers. We’re looking at how we can work with insurers and particularly those innovative new markets that are willing to look at newer and more complex data sets and provide capacity on the back of it. Data is at the heart of the strategy and many of the technology platforms have more data available than we’ve ever had historically.”

 

Helping retain talent, unlock finance and reassure regulators
It’s not just with insurance though, where Aon can help, says Martyn Denney – Aon’s Head of Innovation and Investments. “In the war for talent, advice on how to attract and retain the best talent, whether it’s around executive compensation or health and benefits is critical if a mobility company is to succeed and drive growth in a hyper competitive market. Mergers and acquisition advice is also important not just in helping to plot a path to an IPO, but often it’s more about how we can help these companies raise finance and de-risk themselves in the eyes of potential investors. One area of rapid growth, for example, is in helping businesses to value and leverage their intellectual property – particularly important in the absence of physical assets – to raise debt finance as an alternative to turning to private equity.”

Another risk area is around regulation, adds Spurling: “We’re actively tracking the regulatory trends throughout Europe when it comes to mobility issues like the use of autonomous vehicles or micro-scooters. In many ways it is about how we can work with mobility businesses to both understand those regulatory issues but also provide assurance to the regulators such as through an insurance solution.”

 

Immersed in new technology
Over the next months, Aon and MOVE will be exploring some of these risk challenges and solutions in more detail but, in the meantime, the countdown to MOVE 2023 continues. “We’re excited to immerse ourselves in the new technologies and innovation that will be on show at MOVE 2023 and to work with mobility businesses to secure their future wherever they are on their growth journey,” concludes Denney.

 

The information contained in this document is intended to assist readers and is for general guidance only

Aon: Aon UK Limited is authorised and regulated by the Financial Conduct Authority.

About Aon

Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business.

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Shared Mobility 2023: these trends are shaping the industry

Shared Mobility 2023: these trends are shaping the industry

Which trends will move the needle for the mobility industry in the coming year? How will technology contribute to new solutions for transport? Against the backdrop of these questions, the shared mobility experts at Invers have identified five trends:

(1) The market for carsharing will grow by at least 20 percent.

(2) More focus on profitability.

(3) More offers with longer rental periods.

(4) Shared mobility will become even more sustainable.

(5) Cities and project developers have recognized the potential of carsharing.

 

Siegen, January 10th, 2023 – Achieving climate targets, transformation of transport, and the goal of car-free inner cities are just a few examples of current challenges that require innovative mobility solutions. The following five trends will move the industry in the coming year:

  1. The market for carsharing will grow by at least 20 percent.

For 2022, the German Car-Sharing Association has identified more than 3.4 million customers, which is approximately 18 percent more than in the previous year. The figure demonstrates consistent growth in the market and reflects the plans of numerous shared mobility operators: “Many customers are talking to us about expansion plans,” says Bharath Devanathan, Chief Business Officer at Invers. “We expect the car-sharing market to grow by at least 20 percent in the coming year.” Expansion plans are also evident in recent market developments such as Miles’ acquisition of WeShare and Stellantis/Free2Move’s acquisition of ShareNow.

 

  1. More focus on profitability.

At the same time, the pressure on operators to become profitable is increasing. In the shared micromobility market, operators are expected to further withdraw from less profitable cities to focus on lucrative markets instead. Examples include Bird’s withdrawal from Europe and GoSharing’s withdrawal from Saarbrücken.

To increase profitability, some carsharing operators are outsourcing large-scale operational tasks to specialized service providers such as Carbio GmbH, which can realize economies of scale. Others are focusing on increasing vehicle utilization by offering vehicles on MaaS platforms or in complementary business models, for example corporate carsharing during the week and peer-to-peer carsharing on the weekend. New concepts for fleet sharing and unifying APIs are going to support this approach.

 

  1. More offers with longer rental periods.

The still young trend toward car subscriptions is continuing. Operators of mobility services are thus tapping into new customer segments. Approximately 100,000 to 130,000 car subscription contracts were concluded in France, Germany, Italy, Spain and the UK in 2020, according to the industry experts at Berylls in their study “Snapshot of the European Auto Subscription Market”. The CAR Institute assumes that there will already be between two and four million subscriptions in 2030. Traditional carsharing providers such as MILES or Hiyacar are going beyond short-term rentals and addressing the long-term market, as are traditional leasing providers and car rental companies, for example Sixt or Wheego. They are also addressing new customer segments and countering the resulting risk by monitoring vehicle usage data and terminating access to the vehicle if necessary.

 

  1. Shared Mobility becomes even more sustainable.

In principle, car sharing is already more sustainable than using private vehicles because the individual car is used more efficiently, and the number of vehicles required for mobility services is reduced in the long term. In addition, the carsharing services of numerous operators will be increasingly electric. The French provider Virtuo, for example, plans to electrify half of its fleet by 2025. In Hamburg, carsharing companies Miles, ShareNow, Sixt and WeShare have agreed to increase the proportion of electric vehicles in their fleets to at least 80 percent by the turn of the year 2023/24.

 

  1. Cities and project developers have recognized the potential of car sharing.

The idea of shared mobility is also gaining importance in residential construction: numerous developers are integrating shared mobility solutions into their offerings. By providing shared vehicles in their buildings, developers can save costs by reducing the number of parking spaces they’re required to provide. This trend is particularly evident in the Netherlands, Germany and Italy. In addition, some cities and municipalities are promoting sharing concepts through more carsharing-friendly policies, especially with regard to parking fees. Hamburg’s success with carsharing and Berlin’s turnaround are examples for other cities to follow suit. In many cases, they are linking these policies to the promotion of electromobility. Cologne, Hamburg and Munich already offer free parking for e-vehicles, which should further accelerate the trend toward pure e-vehicle fleets in these cities.

 

About Invers

Invers, inventor of automated vehicle sharing, enables mobility service providers to launch, operate and scale their offerings with integrated hardware and software solutions specifically designed for developers of shared mobility services. As the world’s first shared mobility technology company, Invers is developing and reliably maintaining the fundamental building blocks at scale to offer its customers cost-efficient and easily implementable tech solutions.

The company acts as an independent and reliable partner for operators of services such as carsharing, scooter sharing, ride pooling and car rental with the vision to make the use of shared vehicles more convenient and affordable than ownership. Customers include Share Now, Clevershuttle, Miles, imove, Carify, Getaround, Flinkster, TIER, and Emmy. The company was founded in 1993 and has locations in Siegen, Cologne and Vancouver. The development takes place entirely in Germany. www.invers.com

 

 

Ian Plummer: Are we at risk of stalling on the road to 2030? 

Ian Plummer: Are we at risk of stalling on the road to 2030? 

Written by Ian Plummer

Interest in electric vehicles (EVs) has enjoyed a period of strong growth over the last two years, with the 2030 ban on the sale of new petrol and diesel vehicles and spikes in fuel prices all serving to peak consumer interest. 

However, this period of soaring growth now looks to be in jeopardy as consumer interest is waning. 

2021 saw one in four new car sales being electric but 2022, a year when new car sales have seen some recovery from the supply shortages seen in 2021, just one in seven new car sales were for EVs. 

We’ve seen this decline playing out on Auto Trader, the UK’s largest automotive marketplace, as well. You can see on the below chart that advert views for electric cars have seen significant growth in the last two years and peaked at the height of the UK “fuel shortage” where we saw almost 27% of all new car advert views being for an EV. However, since this peak over a year ago, we have seen interest steadily decline to just 14% as of November 2022, the same as it was a year ago. 

What’s more, this period has seen the supply of new EVs gradually rising. With demand falling and supply rising we may soon find ourselves in a situation we have more new EVs available than there is demand 

So, what’s causing this decline, and what can be done to get us on track as we approach 2030? 

The primary factor behind the recent drop in interest is the much-publicised rise in electricity prices which has depressed demand for electric vehicles.  

It’s important to note that, whilst the rise in electricity prices naturally impacts the running cost of an EV, EVs still do offer significant savings in running costs vs. internal combustion engine (ICE) vehicles, with our latest analysis indicating that, on average, an EV will save owners £124 per 1,000 miles driven (based on home charging costs) even with inflated electricity prices. 

It’s these savings that we need to highlight to consumers to drive interest in the years ahead. 

But whilst EVs do represent a saving when it comes to running costs, they still remain prohibitively expensive for many consumers thanks to a far higher upfront price point.  This“green premium” translates to the average new EV price tag being 36% more expensive than an equivalent ICE vehicle. 

Whilst the cost differential has declined over the years, it has risen since the start of 2022 due to the rise in battery costs. 

The higher upfront cost is also a limiting factor when it comes to who can afford an EV, with EVs very much the preserve of the wealthy. The launch of more affordable options such as the hugely popular MG4 will help to draw in a new buyer demographic but, unless we see upfront costs fall significantly and a far wider range of affordable EVs enter the market, we are at risk of alienating the majority of car buyers and seeing new EV sales slow down even further. 

The challenges I’ve so far outlined have focused on the new EV market, but these challenges are also present in the used market. 

Demand for used EVs has followed a similar trajectory to that of new EVs with the previously mentioned issues dampening new demand also having the same impact on the used market. 

Of more concern however is the fact that the supply of used EVs, which has doubled in the last year as more vehicles return to the market, has now overtaken levels of consumer demand. 

This rise in supply and fall in demand has resulted in EVs sitting for far longer on retailers’forecourts. In fact, used EVs are now the slowest-selling of any fuel type and this has led retailers to start cutting prices in order for them to sell their EV stock. For three consecutive months, used electric car retail prices have fallen on a month-on-month basis, whereas petrol and diesel prices have followed pre-pandemic seasonal trends. 

Whilst this may sound like good news for consumers, these price drops are relatively minor(-2.6% in November), and used EVs, like new, still command a premium over their ICE counterparts with the used EVs being on average £10,000 more expensive than their ICE equivalents. 

Looking ahead, used EV values will continue to depend on supply and demand dynamics. The question is whether demand will keep pace with supply as the absolute number of EVs registered increases over the next decade. 

Based on the latest projections, there will be over a million EVs on the road in the UK by 2024, up from less than 400k at the end of 2021. By 2030, there will be nearly eight million registered, accounting for nearly a quarter of the total car parc.  

The rate of change will be even faster in younger age cohorts. By 2030, over half of all under-five-year-old cars on the road will be electric. 

It’s clear then that are many challenges ahead of us as we approach 2030 and that action is needed to ensure that we see mass adoption of EVs ahead of the 2030 ban. 

There is no single solution to the issues facing the EV market and it remains the responsibility of industry and government to make the switch a viable solution for consumers. 

At Auto Trader, we believe that there are three fundamental areas we all need to focus on to address the issues I have raised here in order that we drive consumer adoption levels 

Making the switch to electric more affordable 

It may take years until battery costs fall below the level needed to achieve price parity, but there are still actions that can be taken to make EVs more affordable in the short-term. 

Creating trust in second-hand electric vehicles 

With supply ahead of demand, the used electric vehicle market needs urgent attention to address the imbalance. 

Accelerating the rollout of public charging infrastructure 

Beyond the headline, the UK needs a low-cost, reliable, and accessible charging solution for those without a home charger and those going on long journeys. Until this is resolved, a large proportion of UK households will not switch to electric. 

By focussing on these three areas, we will ease consumers’ transition to EV ownership and ensure a smooth journey as we continue along the road to 2030. 

You can find out more in our regular report, entitled: The Road to 2030. 

 

Emma Kay: Enough is Enough, together we are stronger

Emma Kay: Enough is Enough, together we are stronger

Written by Emma Kay, Founder at Walksafe

The nights are darker and our streets more dangerous – what can we do to help?

Increased darkness, combined with miserable weather means I end up walking with my head down or under an umbrella far more at the moment. This is far from ideal when you’re trying to be aware of your surroundings, especially on days like today when its pouring and I’m laden with bags and screaming kids. As women it’s ingrained in us to be hyper vigilant as otherwise society deems it to be ‘our fault’. Did she have her AirPods in? Was she walking down well-lit streets? Did she share her journey? Did she have her SOS button ready? The list is never ending and it’s exhausting. 

Is this still what we have to do in 2022? I ask myself on a daily basis and sadly the answer is always a resounding yes. Sometimes I think I’ll chance it, it won’t be me that gets targeted. Then I think of all the women that thought the same thing before me, Sarah Everard, Sabina Nessa, Zara Aleena. So then I decide I won’t risk it, I’ll pull an AirPod out and I’ll quickly set up a HomeSafe on my WalkSafe app. It’s only getting more pressing, more urgent, more dangerous. Many of us are walking home more due to the cost of living crisis (our research found 1 in 5 are altering their behaviour in this way a month ago, likely higher now) and are unable to afford sky high train tickets or a taxi home. With Christmas approaching we are aware of the financial impact of these safer options and are choosing to go out on the streets more.

With the recent clock change and winter nights drawing in, the dangers are more prevalent. Cases of violent crimes on the UK’s streets have risen over the past four years. These include sexual offences and theft against the person. This November and December alone, over 400,000 violent and sexual offences are forecast on our streets (comparison Apr/May and Oct/Nov 2018-21; Open Source Data). This is nearly 16,000 more than were recorded in the lighter months of April and May 2022. I’ve had enough of worrying about my safety when I leave the house, enough of worrying about my friends getting home from our night out, or reading about another tragic girl’s life being taken due to male violence. Now is the time for the Government to spend more on making our streets safer for everyone after dark. 

One simple solution is to increase the amount of street lighting. At WalkSafe we are a personal safety company, but we are also a data company. Our users are able to post where they are concerned about a lack of streetlights. This helps keep our community safer and gives us the insight to feedback to local councils. We are trying to improve safety outcomes for all through this small but actionable solution, one that costs nothing but could have a huge ripple effect if rolled out effectively. We would love to see our wider community think about their neighbours and prevent others from becoming targets of crime. Enough is enough, together we are stronger.