The sharing economy is changing the traditional relationship between parties in a transaction. Individuals are engaging with technology to participate in a sharing transaction — either as a provider of a service or the user of a service. However, the traditional two-party transaction is now expanding to multiple parties. In addition to the provider and the user, the tech platform is now a part of the transaction. Depending on the service provided, a restaurant, autonomous vehicle, apartment building, or other parties may also be involved. In the event of an injury, determining liability and identifying the right coverage can be very complex.
Insurance plays an essential part in the trust dynamic that facilitates permission to operate, while protecting the platform and the user where responsibility for risks may not be clear.
The growth of the sharing economy introduces new variables of liability, creating risks for both businesses, customers and intermediaries. To stay competitive in this fast-changing environment, companies must reassess risks, review existing insurance coverages, and create more robust risk mitigation strategies.
These companies should offer their customers insurance and assistance solutions related to the use of the product or service. Insurance becomes a driver for development and loyalty and a source of additional revenue.
At Marsh, we’ll help your company create an insurance and risk management programme that enables you to better anticipate and mitigate your sharing economy and mobility risks. Taking a proactive approach can help offset the potential for severe legal and financial consequences in the event of bodily injury, property damage, or other losses.
Our industry-leading advisors are able to offer you integrated digital solutions that will create a smooth customer experience for your end users (underwriting and claims solutions), while enhancing your brand and customer satisfaction. Our team of experts design tailor-made insurance programmes and innovative forms of insurance.
FAQs
With experienced and qualified professionals, we take the time necessary to understand your business and your specific risks. We then create a tailor-made solution that will meet your needs, and will support you at all stages of your insurance project (design, placement, implementation, management, steering) for your unique sharing economy offering.
With offices in more than 130 countries, we are able to support the international ambitions of your company. We have a team dedicated to the sharing economy and mobility in each region of the world to ensure a global and shared approach, while respecting the regulatory and cultural constraints of each country.
The establishment of an affinity offer for your customers results from knowledge of your market and our ability to provide you with design, investment, and management solutions.
The distribution of insurance products is a regulated activity, in particular by the Insurance Distribution Directive (IDD) and similar regulations worldwide. At Marsh, we understand the various frameworks that can be put in place to ensure that the insurance offer is in compliance with local rules.
The innovations that sharing economy companies bring to a particular industry are also very disruptive. As traditional players in an industry are threatened by these new business models, they may turn to regulators to help protect their market share, especially already highly-regulated industries such as transportation and housing. Sharing economy companies also tend to rely on contractors to complete transactions. However, there have been court challenges around the world to classify these workers as employees, not contractors. Changing the classification of sharing economy workers could dramatically shift business models and risk profiles.
While technology enables and powers the sharing economy, the failure of technology to perform due to a cyberattack or technology failure is also one of its biggest risks. Sharing economy platforms frequently store personal information and payment information, making them valuable targets for cybercriminals looking for data. The rise of ransomware attacks across all industries should be of great concern to sharing economy companies. An attack that disables your platform would effectively cut off all revenue streams.