German carmaker Daimler AG and Swiss Re have announced a joint venture for automotive and mobility insurance to meet the changing needs in the shift to e-mobility and automated driving.
As part of the 50/50 joint venture, Daimler (DDAIF) and Swiss Re are forming a new company called Movinx, which will focus on developing fully digital automotive and mobility insurance products and will start its operations in Berlin. Movinx will act as a so-called Managing General Agent (MGA) to make insurance an integrated part of the vehicle purchase.
Technological developments such as e-mobility and automated driving create new insurance coverage needs and challenges for pricing and claims handling, which Movinx seeks to provide solutions for. The first insurance products and services will be launched in France in 2021. In the coming years, additional market entries are planned across Europe, in the Americas, and in Asia.
“By joining forces with Swiss Re we can lead transformation in an evolving market environment and advance insurance business. We will establish a new business model as well as co-create and co-own an insurance platform,” said Daimler Insurance Services CEO Ingo Telschow. “This platform enables easy and efficient insurance purchase and customer-centric services by using real time data. Furthermore, we as Daimler Insurance Services are going deeper into the value chain of insurance business, having more influence on product development and pricing.”
Movinx will partner with locally licensed insurers to offer its solutions to customers and cover insurance risk. Meanwhile, insurers and other stakeholders can connect to the IT platform, which provides centralized operations and automated processes supported by a combination of machine- and deep-learning technologies.
The joint venture will be open for cooperations with other stakeholders such as car manufacturers or, more generally, mobility service providers.
Goldman Sachs analyst George Galliers today double upgraded Daimler to Buy from Sell with a price target of $70.91 (25% upside potential), as the analyst is hopeful that change at Daimler is accelerating, in particular at the company’s Mercedes brand.
Galliers also cited an improved truck market as one of the reasons for the double upgrade. (See Daimler stock analysis on TipRanks.
Overall, Wall Street analysts are cautiously optimistic on the stock. The Moderate Buy consensus is based on 9 Buys, 9 Holds and 3 Sells. With shares trading 4.4% above their start-of-the-year level, the $59.94 average price target implies 5.4% upside potential, should the target be met in the coming 12 months.
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