AI InsurTech Enables Pizza Hut Israel’s eBike Delivery Fleet

Over the past 13 months, consumers have grown used to the flexibility and convenience of a lifestyle that is more online than ever before.

With the rapid progress of this digital shift, businesses are gaining access to more and more consumer data, and the tools for leveraging this data to personalize consumers’ experiences are becoming more refined. As consumers grow used to on-demand services and experiences, so do businesses, expecting solutions that meet their specific needs on a moment-to-moment basis.

Demandoo, an on-demand insurance provider based in Tel Aviv, Israel, is taking this mindset to the insurance industry, using artificial intelligence (AI) to provide case-by-case risk assessment and offer insurance solutions that meet the specific needs of each customer. Now, the company has partnered with Pizza Hut Israel to insure the company’s eBike delivery fleet, a vehicle overlooked by traditional insurance providers.

“We are very excited to team up with such an amazing international food company,” Demandoo CEO Avi Manaim told PYMNTS in an interview. “We see a trend with Pizza Hut as an example [of companies that] are gradually shifting their fleet from motorized vehicles to non-motorized vehicles because now with us, if they have an insurance solution or those kinds of vehicles… [we] save them [a] huge amount of money per vehicle.”

Insurance In Today’s On-Demand Economy

Manaim explained that Demandoo’s solutions fit into the broader trend across industries of providing personalized, on-demand services enabled by smart analytics. He pointed to how Netflix “revolutionized the way we are consuming our content,” how Spotify changed music, and how Airbnb transformed the travel and hospitality industry as key markers of how we have come to expect instant, flexible and custom-made experiences.

“Everything over the last eight … years has been changed dramatically in terms of personalization and the actual need of each and every … customer,” reflected Manaim. “…Insurance … is one of the oldest and [most] traditional industries in the world, and it’s already on an exciting journey to reinvent itself … insurance products are more digitized, more personalized, and more dynamic … Any insurance product, that won’t meet those standards and capabilities will be less engaged by the customer.”

He added that Demandoo’s predictive analytics make it possible to price on a per-use basis, modulating the price depending on the AI’s assessment of the risk, which takes into account everything from weather to terrain to route to understand in the risk in greater detail.

“The price won’t be, for example, 20 cents an hour, but a range between, just for example, 13 to 85 cents an hour, depending on how you mitigate your risk, and how you behave, and how you use it, and when you use it, and a dozen other parameters that change between each event.”

Smarter Insurance Equals Smarter Fleet

Manaim noted that, given both this flexible pricing and the cost that Pizza Hut Israel saves with each motorcycle swapped out for a non-motorized eBike, a swap made possible by these AI-enabled policies, Demandoo saves the pizza chain about 15,000 Iraeli new shekels (around $4,500) per year.

“One of the main advantages that we offer Pizza Hut — and this is why they want to engage with us — is … we allow them to break the traditional product,” he explained. “They already had an insurance, but it was a yearly product. So … we allow them to pay only when the actual risk is occurring, only [during] deliveries themselves.”

Traditional insurance companies offer “no sufficient solution for non-motorized vehicles, such as scooters, eBikes eScooters, regular bicycles, etcetera,” he said. Traditional insurance companies only offer third-party liability and personal accident policies for “traditional products,” such as cars and motorcycles. Demandoo’s more flexible, personalized policies allow the pizza chain to use the most cost-effective delivery vehicles without adjusting for a limited set of antiquated insurance options.

“With us, they can now introduce the same products and on-demand usage insurance for the non-motorized vehicles,” Manaim said.

The Internet-Enabled Future Of Insurance

Manaim said he believes that the future of InsurTech comes down to two key technologies — the Internet of Things (IoT) and AI.

“All the IoT capabilities that allow insurance companies, and mainly InsurTech companies, to better understand how to do improved underwriting, claims management, claims handling, fraud detection and prevention all lead to more accurate pricing, both for lower risk clients and higher risk potential clients.”

While these IoT capabilities allow companies to gain a more comprehensive picture of the moment-to-moment risk of any action, AI allows the companies to interpret this picture in actionable ways.

“AI capabilities [allow us] to better … bring the risk modeling to next generation and to the next level,” he said, noting that they enable better “risk modeling” based on increasingly “granular information,” allowing companies the capability to “build new products for the on-demand industries.”

He noted that on-demand capabilities will be key to InsurTech’s future.

“The whole gig approach is getting wider and wider all over the world,” he said. “…And we believe that as the gig economy grows, there is a need for more advanced and personalized solutions for those giggers … We see that on-demand is the most optimized solution for those gig workers themselves, or the gig worker platforms or the marketplaces for the gig workers.”

To learn more about how the on-demand economy is changing the way we do business, check out PYMNTS’ Next-Gen Payroll Tracker® and Gig Economy Tracker®.