Embrace sharing or be overtaken

A leading insurance analytics leader has called on the insurance industry to embrace the opportunities offered by the sharing economy or risk being cut out of a booming sector of the economy.

Aon Analytics CEO Stephen Mildenhall, in Australia for the Aon Benfield Hazards Conference, told Broker Buzz that the rise of internet marketplaces, such as Uber and Airbnb, is a challenge the industry needs to confront head on.

“The insurance industry really needs to stay sufficiently ahead of developments in the sharing economy space so that they are seen as helpful partners who are creating the types of products these operators need,” he says. 

“If we don’t, then these operators are capturing all the data they need and they’ll have the opportunity to set up captives.

“It’s going to be a matter of the insurance industry bringing case underwriting knowledge and particularly contracting and claim-handling abilities to the table to demonstrate, yes, we can move quickly enough and we can produce useful products.”

Mildenhall says the insurance industry has a history of innovation when it comes to data analytics and has an opportunity to lead in the new digital environment.

“The industry has been using big data to get new insights, in the form of credit histories for underwriting for example, very successfully for 20 years,” he says.

“The insurance industry was an early adapter of the concepts behind big data and pushed some of the most sophisticated statistical modeling techniques.

“The question is really whether we’re going to get overtaken in that race by other people bringing newer data sources to the table and maybe some more out-of-the of box modelling techniques.”

IAG last week released an add-on product aimed specifically at people hosting guests in their homes.