Sharing Economy in Insurance - Thematic Intelligence

Sharing Economy in Insurance - Thematic Intelligence

Summary

In response to the growth of the sharing economy, the insurance industry has had to innovate as the lines are blurred between personal and commercial use. Flexible and on-demand insurance products – facilitated by the evolution of technologies such as big data, artificial intelligence, and the Internet of Things – have become highly desirable in the sharing economy. These products offer commercial risk management without the unaffordability that would come for many individuals with purchasing a full commercial policy. Peer-to-peer insurance is still yet to fully take off although an increasing number of startups are applying the model to reduce the perceived inefficiencies in traditional insurance. This is particularly effective for targeting younger demographics, who are also more likely to be involved in the wider sharing economy.

The rise of the sharing economy has brought about two separate areas for insurance innovation. New products have been created to cover owners sharing assets, or renters borrowing said assets. This has been necessitated as personal property, when insured with a personal policy, cannot be used commercially. These new products can take various forms depending on the asset shared and the platform or company used to facilitate the transaction. The second area for innovation driven by the sharing economy is P2P insurance. This is, in essence, the use of sophisticated technology (such as blockchain) to return insurance to its original model of mutuality.

Scope

• Insights from GlobalData’s 2022 UK Insurance Consumer Survey indicate that younger consumers (Generation Z and millennials) are more likely to use the sharing economy. 28.7% of Generation Z and 20.5% of millennials have used, are using, or intend to use the sharing economy.
• The sharing economy is also more widely utilized in London than the UK average, with 28.9% of London dwellers indicating that they either use, will use, or have used the sharing economy, compared with the UK average of 14.5%.
• Most leading P2P platforms offer insurance through an embedded model in collaboration with an insurer. For insurers, this creates access to new markets and target groups.

• Identify leaders in insurance provision for the sharing economy.
• Understand how competitors are looking to break into the market.
• Identify opportunities in a growing market where insurance provision can be made simpler for the customer.
• Determine how insurance is provided in different segments of the sharing economy.