Insurers back US autonomous vehicle start-up

US insurer State Farm and Japan’s Tokio Marine have joined in a $111 million funding round for autonomous vehicle technology start-up May Mobility.

The funding will allow May Mobility, which is based in Ann Arbor in Michigan, to continue work with Toyota Motor Corporation on self-driving people movers, May Mobility said in a statement. 

May added that it is aiming to take human drivers out of vehicles in commercial operation by next year.

The latest funding around was led by Japanese investment firm Sparx Asset Management Co’s Mirai Creation Fund II.

State Farm has invested through its State Farm Ventures arm.

Insurance industry support for autonomous vehicle technology has continued this year. Earlier this summer, Bermudian (re)insurer SiriusPoint said it was investing in the autonomous vehicle sector through a strategic partnership with Managing General Agent (MGA) Avinew.

Avinew, which was set up in 2016, is an underwriting platform focusing on semi-autonomous and autonomous motor usage.

The insurance product covers AI-enabled vehicles and claims it is plugging a knowledge gap in the market caused by a lack of ability to understand and track autonomous automobile usage.

“Avinew has the potential to be a disruptive force in the automotive insurance market and for us, represents meaningful strategic value,” Darryl Siry, CTO at SiriusPoint, said at the time.

SiriusPoint will offer fronting services, reinsurance, and strategic advice to Avinew, and the investment will allow Avinew to grow its product offering and develop its technology to gain market share.

However, some players in the sector are having to make cutbacks. Autonomous vehicle company Argo AI, which is backed by Ford and Volkswagen, said last week it would cut 150 of its more than 2,000 employees worldwide.

Ford injected $1 billion into Argo AI in 2017, and Volkswagen followed up with a $2.6 billion investment in 2020.