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OLDWICK - OCTOBER 06, 2015 02:20 PM (EDT)
This second in a series of “First Monday” episodes spotlights A .M. Best Senior Financial Analyst Michael Venezia explaining how growth in ride-sharing services, such as, Uber and Lyft, has the insurance industry contemplating exposures. Click on http://www.ambest.com/v.asp?v=uber1015 to view the entire program.
The next “First Monday’ episodes will include a look at how Mexico’s new Solvency II- like regulations could lead insurers concentrated in certain lines of business to seek capital relief through reinsurance. “First Monday” is A.M. Best’s monthly program featuring commentary by the company’s leading analysts.
Transportation Networks, or TNCs, are a growing market that provides passenger transportation using a technology platform, such as, a mobile application (app). Once the passenger downloads the app to a smartphone, he or she can select an available driver and ride. However, since TNCs differ from traditional taxi services, the insurance industry continues to sift through the reliability issues and the related exposures concerning hired drivers.
“The insurance concerns revolve around how and when to insure the vehicle as commercial, if at all,” said Venezia. “Since a personal insurance policy excludes or generally excludes liability coverage for any insured acting as a transportation service for hire, the prevailing question is, are there gaps in coverage that could affect the driver, the vehicle, any person suffering injuries and lienholders.”
“Also there are three exposure periods for the TNC business, the first is when the driver logs into the app, but is not matched with a passenger, the second is when a match is made but the passenger has not entered the vehicle and the third is when the passenger is occupying the vehicle,” continued Venezia.
Venezia believes that the insurance industry will eventually develop more effective risk management programs for this new technology.
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