Bitesize InsurTech: Drover

January 31, 2019

Drover offers car subscriptions with insurance included. We think the business is interesting as an example of how mobility is evolving and how insurance will be impacted.

Drover gives people access to a car, either for a short period (say, a few days a month) as part of a subscription package or for a longer period (like 6 months or a year). Depending on the package chosen, customers can swap, upgrade or downgrade their car online. There is also a package for private hire (i.e. taxi) drivers. The subscription fee paid by individuals includes all associated vehicle running costs (bar fuel) including insurance, which is provided by Munich Re Digital Partners.

Incidentally, Digital Partners, which Oxbow Partners helped set up, recently passed £100m in GWP.

Cars are sourced from motor fleet companies including dealerships, car rental companies and leasing companies. These partners list their vehicles on Drover and receive a payment once a vehicle has been rented. Drover is currently working with over 100 fleet partners in the UK including Europcar.

Drover raised a £5.5m Series A round in late 2017. Plans for 2019 include the launching of white-label and B2B products, expansion into Europe and the use of vehicle data to improve insurance pricing.

The Oxbow Partners view

Drover, we admit, isn’t really an InsurTech. It is an innovative consumer proposition that requires insurance to work. However, sourcing this cover is not easy. If you’re Europcar and need to insure your own fleet, you can happily ring up a commercial insurer and buy a fleet cover. It’s harder if you’re a mobility startup and need a dynamic product that responds to the utilisation of a third party fleet. There’s an insurance business opportunity from the evolution of mobility – and Munich Re’s Digital Partners team has been quick to seize it.

Second, we find Drover to be an interesting example of how mobility is evolving. Many commentators are focused on full autonomy but there will be transition states: flexible ‘mobility-as-a-service’ is one of these. One thing seems all but guaranteed for insurers: all mobility trends point to motor insurance becoming a centrally purchased corporate product rather than a personal lines policy. Existing insurance distribution expertise (e.g. aggregator pricing) will become less important and the ability to originate, negotiate and execute global agreements will become critical.

It’s time for motor insurers to reflect on their motor strategy.