Insurance and brokers have a vital and strategic role to play in the sharing economy, says Geoff Stooke, joint managing director of Modern Risk Solutions at yesterday’s session at the 2016 NIBA Convention.
“Consumers in this new economy are obviously experiencing access as easy as ownership. The new generation are sharing, streaming, renting – these are obviously emerging generational trends,” he observed. “The insurers that have aggregated products around traditional use of services and goods, they are going to find that brokers are going to have another golden age because we can solve these complex problems. As problem solvers we can understand how our clients are using their assets and appropriately coordinate our advice and look at solutions for them.”
And insurance has an important strategic role as well. One of the biggest threats is engaging a service via a platform and then going ‘offline’. Insurance “closes that user loop”, Stooke said, so you’re “not going to have user leakage”.
“People are going to go back and use that platform because if they go offline, there is no insurance in place. It has a strategic role in those platforms. It obviously mitigates any adverse effect, reduces the friction between users, and there’s a third party to mediate if there is an issues.”
Stooke pointed out that the peer-to-peer network operated on trust. “Trust is the ultimate currency in the sharing economy – if you can’t trust the other side of the transaction nothing happens. Insurance in-builds that trust. Insurers can make these peer to peer platforms more trustworthy,” he said.
Three years ago, trying to help clients in this space solve problems, and talking to insurers about it was “a really difficult discussion”, Stooke noted. “It’s getting easier … I was consistently hearing ‘no’ but now I’m getting ‘maybe’ – that’s a bit of an improvement.”
And it can’t come too soon, as Sascha Hunt, Allianz group manager consumer marketing, pointed out during her presentation, these things are already here, for example, artificial intelligence, virtual reality and tracking devices. “These things are not as far-fetched as we think they are,” she warned.
They are also growing exponentially. Case in point: Uber which reported its 2 billionth ride globally by the middle of this year, when last December after five years of operation, it had recorded its 1 billionth trip, according Matt Denman, general manager Uber Victoria.
“[Uber is] solving problems – one problem that we see,” he said. “The success of Uber as a business we focus everyday on solving incremental problems … through bringing technology to bear on the situation. What happened when you look at Uber … [is there is] … product market fit. There is a real market for safe, reliable affordable transportation and Uber has successfully created a platform that allows people to access it. At its very heart, Uber is just solving a problem that exists and has existed for some time.”
As will many of these new technologies in the sharing economy.