15th April 2018

Lloyd's launches new report-“Sharing risks, sharing rewards: who should bear the risk in the sharing economy?”

Lloyd’s, a growing global centre for sharing economy insurance solutions, has launched “Sharing risks, sharing rewards: who should bear the risk in the sharing economy?”, a new report analysing risk perceptions in the booming industry.
The sharing of assets and services creates new opportunities but also new risks. It can be difficult for traditional insurance coverages to be applied to disruptive sharing economy models as assets are fragmented–owned and shared amongst users–and new multi-party relationships between platforms, providers and consumers draw further questions around who is ultimately responsible for managing and mitigating risk.
“In our work with sharing economy platforms, we’ve found that insurance not only protects against financial loss, but it also enables growth,” said Vincent Vandendael, chief Commercial officer at Lloyd’s.
Based on our findings, instilling consumers with confidence by clearly defining and protecting against risk can help remove barriers to engagement in the sharing economy. There is no doubt shared platforms are growing at a lightning pace, so it’s important that the insurance products created for these companies are able to grow and change with them– from a ten person startup to a global disruptor.”
Insurers have long provided insurance solutions for ‘tangible’ physical assets, but in the sharing economy assets are often intangible including intellectual property, trust and reputation. Assets in the sharing economy are fragmented as they are owned and shared among various parties requiring a different approach to risk management based on the behavioral economics of consumer preferences and attitudes toward risk.
Survey respondents citing personal safety as their greatest concern with the sharing economy-52%
UK and US consumers feeling that the risks of the sharing economy outweigh the benefits-58%
-Sharing economy risk at Lloyd's-Lloyd’s is leading the way in creating fit-for-purpose products for the shared economy.
Both sharing economy consumers and providers cite a number of concerns around risk–including personal safety, quality of service, damage to assets, theft and lack of sufficient safeguards in the event something goes wrong–which may prevent shared platforms from unlocking untapped supply and demand for their services.
“The sharing economy itself created a new risk landscape with many untested assumptions around who should be managing risks and liabilities, because of this insurance can play a significant role,” said Trevor Maynard, head of Innovation at Lloyd’s. “As these risks are addressed and written in our market, we see the power insurance has to give consumers peace of mind and providers and platforms confidence to grow.”

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