The future of insurance & the sharing economy

“The sharing economy looks different from the typical corporate risk. You build your claims tools and your actuarial data. They need to be dynamic and work in-house or with a TPA to get the information right to the point, ”said Laura Langone of Airbnb. (Photo credit: Daniel Dror / Shutterstock)

Companies like Uber, Instacart, and Airbnb have radically changed the way consumers view certain industries. These emerging and constantly developing companies also have special insurance needs and demand flexibility from the industry.

Laura Langone, Head of Insurance at Airbnb, noted the tremendous opportunity these companies offer insurers: “The sharing economy is not disappearing and is evolving. We've seen it with Uber, and we've seen it with home sharing and many other goods and services. "

The needs of the companies that make up the sharing economy are each unique. This, according to Langone, makes it a little harder to find a cover than simply going out on the market and buying a product that is already there.

With this in mind, Chris Moore, head of ibott and assistant active underwriter at Apollo Syndicate Management Ltd. in 1971, said the long-term perspective was that of an ever-evolving insurance product.

"We have to move from this transactional relationship where we meet every 12 months to renew a policy," he said during a RIMS Live 2021 event. "We have to talk regularly about our risks and regularly about our data."

Looking at the future of policy for sharing economy companies, Langone said it was important to keep the following three pillars in mind:

Building blocks for future insurance products

1. Product: Creating a product is a unique task that requires understanding of the business as well as the design and manuscripting. All of these facets must also be supported by data.

“It's not just cake in the sky. The market is not going to give you everything you need, ”Langone said. “The sharing economy looks different from the typical corporate risk. You build your claims tools and your actuarial data. You have to be dynamic and work in-house or with a TPA to get the information right to the point. "

2. Program: Airbnb wanted to provide coverage to their hosts and knew this was a risk not many insurers would take. Langone said the company's goal is to create a marketplace. This required partnership and industry education about the unique risk that the rental business was exposed to.

For Airbnb, finding a solution meant setting up its own agency and company plan. However, Langone noted that this may not be the ultimate goal for the company or the sharing economy.

“We also want the market to develop so that hosts and guests can be treated independently. We want the market to find a solution so that we don't have to do it ourselves, ”she said.

3. Compliance: While not every emerging business model is overseen by the government, those with true scalability are sure to see the specter of regulation.

"You cannot operate in all of the markets we operate in, and you cannot operate in hybrid industries without thinking about compliance issues," said Longone. "Maybe they're not there yet, but companies will have these hurdles along the way they need to look."

To achieve this, it is important to understand how the company works and where it is developing. With these factors in mind, the programs should then have built-in flexibility to adapt to changing regulatory landscapes.

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