Aon plc (NYSE:AON) AON recently joined forces with Indianapolis-based Insurtech firm CarrierHQ to introduce the Last Mile Delivery insurance program in a bid to benefit operators of the last mile delivery industry.
The innovative program offers cost-effective, tailored and uninterrupted coverage solutions aimed at minimizing the hassles connected to frequent policy renewals. Customers are only required to pay premiums when vehicles are operational. This sounds good considering the cyclical nature of the transportation industry, which remains vulnerable to several economic volatilities.
The tech-based insurance solutions will cater to the diversified policy needs of operators consequent to binding of a policy. Also, customers will be provided a cutting-edge user interface and streamlined application processes. The recent move seems to be a time opportune one since the last mile delivery space, which deals with the distribution hub delivering goods and services to the end user, continues to grapple with several operational challenges.
The companies have been intensifying focus on accelerating the last mile delivery process, whose main goal is to facilitate timely and affordable delivery of goods and services in proper condition. Therefore, Aon’s Last Mile Delivery insurance program can tap the prevailing scenario, wherein customers demand faster shipping times and constantly look for alternatives offering enhanced transportation capabilities. The program also intends to reach underserved regions, which grapple with fewer delivery points.
Rationale Behind the Move
The latest initiative highlights Aon’s sincere efforts to harness the tremendous potential of the last mile delivery industry. The space has witnessed substantial growth since the last few years, courtesy of a number of factors as stated by global market research firm, Brandessence.
Some of the factors cited in the Brandessence report, which are expected to drive the market growth, are surge in online orders triggered by the COVID-19 pandemic, continuous expansion of transport facilities and rampant technology advancements. Based on these tailwinds, the research firm predicts the same market to witness a CAGR of 9.3% over the 2021-2027 period.
CarrierHQ seems to be the apt partner for Aon in expanding the reach of the Last Mile Delivery insurance program amid the last mile delivery operators. CarrierHQ boasts of delivering custom insurance solutions making use of their sound expertise and experience.
Aon remains committed to devising insurance solutions for the transportation industry. Earlier in 2019, both AON and CarrierHQ partnered to introduce of the most rapidly growing commercial trucking insurance programs in the market — Small Fleet Advantage program. In April 2021, Aon unveiled a cargo insurance solution for offering financial and supply chain protection, thereby ensuring large-scale distribution of COVID-19 vaccines worldwide.
Aon, which carries a Zacks Rank #3 (Hold), continues to launch diversified solutions for broadening its product portfolio and bolstering client reach. AON launched a digital cyber insurance solution in December 2020. The global professional services firm also introduced QoIP Solution during last year.
Similar to Aon, other insurers offering coverage solutions for the transportation industry include The Travelers Companies (NYSE:TRV), Inc. TRV, Assurant (NYSE:AIZ), Inc. AIZ and The Allstate Corporation (NYSE:ALL) ALL.
Travelers provides a wide suite of property and casualty insurance products and services to its customers. Among the portfolio, TRV offers insurance for the marine transportation industry and linked services through the Business Insurance segment. Such a compelling insurance product suite generates higher premiums for Travelers, which rose 5.9% in the first nine months of 2021 from the prior-year comparable period.
Assurant collaborates with renowned brands to devise innovative products and services, which results in better customer experiences. Through the Global Automotive business, AIZ underwrites and offers administrative services for vehicle service contracts (“VSCs”) and ancillary products offering coverage for vehicles and their parts. Net earned premiums, fees and other income of Assurant’s Global Automotive unit grew 9.7% in the first nine months of 2021 on a year-over-year basis.
Allstate acquired National General in the beginning of this year through which the insurer provides personal and commercial automobile insurance products. ALL has a strong presence in the non-standard auto market as well. In June 2021, the insurer inked a deal to acquire the non-standard auto insurance carrier, SafeAuto. Thereby, auto insurance contributes a substantial portion to the sound performance of Allstate.
Shares of Aon have gained 40.3% in a year compared with the industry’s growth of 26.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Shares of Travelers, Assurant and Allstate have gained 9.7%, 15.6% and 4.9%, respectively, in a year.
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