INSURERS must rethink traditional coverage to create solutions for the sharing economy, a new consumer survey from Lloyd’s and Deloitte suggests.
Their report, ‘Squaring risk in the sharing age – How the collaborative economy is reshaping insurance products,’ says sharing is widespread and tremendous growth opportunity still exists.
The study of six key markets — China, United Arab Emirates, Germany, France, U.K. and the U.S. — focuses on the peer-to-peer model and specifically the services, real estate and finance sectors.
It shows that more than a quarter of the population has either bought services or rented possessions from their peers via shared platforms in the past three years.
About 500 million people share assets or services across these six key markets, and close to 680 million people make use of them, while 57% of adults who have sold services or lent products in the sharing economy in the past three years were insured by transaction-embedded or personally owned cover.
The researchers said there is the potential for double digit increases in the percentage of the population willing to share services or assets.
The report calls attention to the role of the insurance industry in supporting shared platforms as they grow and develop.
“Sharing economy platforms have transformed entire industries because they’ve rejected the status quo and challenged the way we think about once traditional goods and services,” said Trevor Maynard, Lloyd’s head of innovation.
“In order to effectively serve the sharing economy, we as insurers must follow that example and rethink traditional insurance products.” The report highlights that transacting in the sharing economy is not without risk and adequate protection for all parties means insurers must continue working to adapt traditional coverages to fit the unique needs of this sector, whether it’s solutions provided by platforms via transaction-embedded cover, or a product purchased independently by sharing economy participants.
A range of insurance products currently offered cover potential risks such as losing a possession, facing liability or suffering damage, among others. Despite these risks, the positive experiences and benefits provided by the sharing economy mean that it continues to grow and diversify. The opportunity for sharing economy platforms and the insurance industry to work together is clear, Lloyd’s said.