Electric scooters and beyond – micromobility risks
E-micromobility – electrically powered e-scooters and beyond – is evolving fast, with ever new vehicle types and uses. It promises a sustainable response to traffic-loaded urban centres, and also to consumer demand for convenient and cheap short-distance rides. Regulation, however, needs to keep up with the changing dynamics and for insurers, new risks keep emerging.
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- With a lack of claims data and regulatory disparities, the dynamic e-micromobility sector brings significant uncertainties and increased risk for insurers.
- Liability exposures arise from injured riders alleging product defects and / or lack of warnings. Pedestrians who have been hit by scooters or who have been injured after tripping over discarded scooters are also bringing suits. In addition, there are environmental concerns, with e-scooters being thrown into waterways by people opposed to their presence.
- The rental of e-scooters requires sharing of personal information, which gives rise to cyber risk. Data theft may be an issue, and hacking could lead to remote vehicle manipulation, potentially affecting entire fleets.
- E-scooter related injuries are increasing.1 Life & Health books can be impacted by increased mortality, disability and medical expense claims. Workers compensation insurance may cover employees injured using shared mobility for work purposes and / or while commuting.
Do you remember the Segway that appeared on cityscapes two decades ago, a symbol of personal transport means for the future? The self-balancing single-axle electro-mobile amazed for short distance rides but has already been consigned to history. After a number of spectacular accidents – involving prominently a former US president, the Segway company owner, and world champion runner Usain Bolt – production was halted in 2020.2
The Segway may disappear but it set in motion a trend of e-micromobility, which continues to develop fast. There has been an e-scooter revolution since 2017, with cities across the world becoming a battleground for shared rental models. There is also competition among pedestrians, cyclists, cars, buses, trams and e-scooter users, for public pavement and road space. With their increasing usage, accidents involving e-scooters have risen, usually due to user inexperience or technical failure.4
The associated limited loss experience to date is a challenge for insurers. So too is the slow pace of regulatory adjustment and large diversity across jurisdictions with respect to definitions, age restrictions for e-scooter use, speed limits, and allowable areas of operation and parking. These factors, along with different use and ownership models (from individual private ownership to fleet shared rentals), and technological innovation that is yielding ever-more new vehicle types, add to the emerging risks around urban e-micromobility.
Insurers need to consider potential impacts on existing covers and opportunities from new e-mobility offerings. Lack of long-term (loss) experience makes risk pricing difficult. Market entry of large transport firms (eg, big ride-sharing service providers or traditional car manufacturers) may be a game changer for what has typically been a start-up business sector. It could increase the size of the risk pool for the insurance industry.
1. E-Scooter-Related Injuries Are on the Rise; CPSC Releases New Study and Public Service Announcement, 16 September 2020, https://www.cpsc.gov/Newsroom/ News-Releases/2020/E-Scooter-Related-Injuries-Are-on-the-Rise-CPSC-Releases-New-Study-and-Public-Service-Announcement
2. N. Gray and K. Hall, “Lessons from the Awkward Life and Death of the Segway”, Bloomberg CityLab, 15 July 2020, https://www.bloomberg.com/news/ articles/2020-07-15/rip-segway-the-dorky-grandfather-of-micromobility
3. SAE J3194™ Taxonomy & Classification of Powered Micromobility Vehicles, Society of Automotive Engineers SAE, https://www.sae.org/binaries/content/assets/cm/ content/topics/micromobility/sae-j3194-summary---2019-11.pdf
4. E-Scooters – Micromobility menace or urban transport revolutionary? Swiss Re Institute Life & Health Underwriting Insights 2019. Hazards can be categorized according to three broad areas: 1. mechanical, 2. electrical, 3. human factors. Consumer Product Safety Commission USA, Safety Concerns Associated with Micromobility Products, 8 April 2020. https://www.cpsc.gov/s3fs-public/Report-on-Micromobility-Products_FINAL-to-Commission.pdf?THHIorYXAZ.KiZnobh1o7.7