The FINANCIAL — Differing views on who should take on sharing economy risk could prove a barrier to realising the sector’s exponential growth targets.
Lloyd’s, a growing global center for sharing economy insurance solutions, on April 10 launched “Sharing risks, sharing rewards: who should bear the risk in the sharing economy?”, a new report analysing risk perceptions in the booming industry.
The sharing of assets and services creates new opportunities but also new risks. It can be difficult for traditional insurance coverages to be applied to disruptive sharing economy models as assets are fragmented – owned and shared amongst users – and new multi-party relationships between platforms, providers and consumers draw further questions around who is ultimately responsible for managing and mitigating risk.
“In our work with sharing economy platforms, we’ve found that insurance not only protects against financial loss, but it also enables growth,” said Vincent Vandendael, Chief Commercial Officer at Lloyd’s.
“Based on our findings, instilling consumers with confidence by clearly defining and protecting against risk can help remove barriers to engagement in the sharing economy. There is no doubt shared platforms are growing at a lightning pace, so it’s important that the insurance products created for these companies are able to grow and change with them – from a ten person startup to a global disruptor.”
Insurers have long provided insurance solutions for ‘tangible’ physical assets, but in the sharing economy assets are often intangible including intellectual property, trust and reputation. Assets in the sharing economy are fragmented as they are owned and shared among various parties requiring a different approach to risk management based on the behavioral economics of consumer preferences and attitudes toward risk.
Differing views on who should take on sharing economy risk could prove a barrier to realising the sector’s exponential growth targets.
Lloyd’s, a growing global center for sharing economy insurance solutions, today launched “Sharing risks, sharing rewards: who should bear the risk in the sharing economy?”, a new report analysing risk perceptions in the booming industry.
The sharing of assets and services creates new opportunities but also new risks. It can be difficult for traditional insurance coverages to be applied to disruptive sharing economy models as assets are fragmented – owned and shared amongst users – and new multi-party relationships between platforms, providers and consumers draw further questions around who is ultimately responsible for managing and mitigating risk.
“In our work with sharing economy platforms, we’ve found that insurance not only protects against financial loss, but it also enables growth,” said Vincent Vandendael, Chief Commercial Officer at Lloyd’s.
“Based on our findings, instilling consumers with confidence by clearly defining and protecting against risk can help remove barriers to engagement in the sharing economy. There is no doubt shared platforms are growing at a lightning pace, so it’s important that the insurance products created for these companies are able to grow and change with them – from a ten person startup to a global disruptor.”
Insurers have long provided insurance solutions for ‘tangible’ physical assets, but in the sharing economy assets are often intangible including intellectual property, trust and reputation. Assets in the sharing economy are fragmented as they are owned and shared among various parties requiring a different approach to risk management based on the behavioral economics of consumer preferences and attitudes toward risk.
