ERGO and Californian start-up Fair to cooperate on digital automobile insurance solutions

ERGO Mobility Solutions (EMS), the automotive and mobility arm of ERGO Group, and the Californian Car-as-a-Service start-up Fair have signed a cooperation agreement at the Consumer Electronics Show CES in Las Vegas. Both companies intend to expand the Santa Monica-based mobility provider's existing business model by adding digital car insurance modules.

Target regions are initially selected European markets and the USA, which are addressed via partnerships with Munich Re companies. Georg Bauer, co-founder and chairman of Fair: “We are very happy to be cooperating with ERGO Mobility, an experienced and highly skilled partner who will be bringing its expertise in motor insurance for the digital age to our cooperation. This gives our customers access to attractive, process-optimised car insurance solutions which fully comply with the Fair commitment to digital, totally paperless services provided through our app. The new cooperation enables us to expand Fair’s range of services by adding another core element to our ‘Car-as-a-Service’ philosophy.”

“The cooperation with Fair underscores the strategic alignment of ERGO Mobility Solutions as an innovative provider of mobility-based insurance solutions”, says Karsten Crede, board member of ERGO Digital Ventures AG responsible for ERGO Mobility Solutions. “With a consistent focus on delivering customer benefits, we will be contributing to Fair’s unique success story as a leading provider of Car-as-a-Service solutions.”

The partnership with EMS enables Fair to offer its customers a full and flexible choice of insurance products for mobility solutions with flexible terms, which is a highly innovative solution on the insurance market.

Fair’s subscription service uses an app to enable customers to get a car through their phone and use it for as long as they need. The Car-as-a-Service (CaaS) concept allows customers to choose a used car from over 40 brands. The monthly fee includes a warranty, maintenance and roadside assistance. As an alternative to conventional, long-term leasing contracts, Fair’s service meets the growing demand for greater flexibility.

ERGO contributed to Fair's recent Series B funding round of US $385 million led by SoftBank, marking the second investment of ERGO’s corporate venture fund. The €100m-fund was launched in 2018 and integrated into the investment activities of the Munich Re Group. Over the next five years, the fund will provide venture capital for start-ups and young companies.

“We believe that the mobility sector is a core business segment”, says Gregor Wiest, responsible for ERGO’s global investment activities. “It has experienced a disruptive development over the last few years and it is currently in the process of reinventing itself. We want to participate in this development. With our expertise in risk management, we can make a significant contribution to reducing total operating costs and creating the framework to make alternative insurance products for the mobility sector even more attractive.”