CARING ABOUT SHARING
The sharing economy – think Uber and Airbnb – has grown exponentially over the past decade. However, Urtzi Grau, Jim Minifie and Allianz’s Philip Heath warn that with new business models come new risks – Martin Wanless investigates. Traditionally, brokers could look at insurance rather simply. On one hand, there were personal lines, on the other were a vast array of business-related insurances. The same client may well have needed both, and indeed from a clientrelationship perspective, it often paid to help ensure the client’s full range of risk was covered. Over recent years, however, those two areas have begun to overlap. Thanks to the connectivity enabled by the internet, and the growth of opportunity that’s followed, we’ve seen the rise of the sharing economy, in which people use personal possessions – from a hammer to a holiday home – to earn a few extra dollars. NEW BUSINESS MODELS, NEW RISKS When we talk about the sharing economy, the best examples are the likes of Airbnb, Uber and Airtasker. Whether you want to ‘rent’ out your home, car or tools to someone else, you can feasibly do so in a matter of minutes, thanks to a third party facilitating the transaction. Urtzi Grau, Director of the Master of Research and Director of the Master of Architecture at the School of Architecture at UTS, and co-author of the Future of Living1 report, commissioned by Allianz in partnership with UTS, says “These platforms are basically 10 years old, so they’re still extremely new. “There’s been two models of backlash – one a rejection of some of these models by some elements of society, and another in terms of attempting to understand and regulate these models of business, and trying to figure out how to do it well.”
When new business models emerge quickly, it presents challenges to all concerned – as we’ve witnessed with restrictions on the number of Airbnb properties in some areas, and restrictions on the presence of Uber in others. “Even the bite-sized transactions you find on sharing platforms such as Airbnb can have big implications for risk,” says Jim Minifie, former Productivity Growth Program Director at the Grattan Institute and current visiting fellow of the Committee for Economic Development of Australia, and author of Peer-to-Peer Pressure: Policy for the Sharing Economy2. “Hosts and guests are usually well-behaved, but things can go wrong for them or for third parties, whether it’s injury, property damage or theft. Not surprisingly, they and insurers have been keenly interested in who bears the costs and risks of the sharing economy.” ATTENTION NEEDED “It’s an incredibly complicated area of insurance,” says Philip Heath, General Manager of Consumer and SME/ Farm Platform Solutions at Allianz. “Airbnb and Uber are good examples of where you’re using a domestic item normally used for personal use, for business use. “On most private domestic policies, you’ll have exclusions or limitations as to how you use that asset for business.”
“Even the bite-sized transactions you find on sharing platforms such as Airbnb can have big implications for risk.”
1 https://www.allianz.com.au/aalaus/aalaus.nsf/docs/future-of-living-report/$file/Allianz_The_Future_of_Living_FINAL.pdf 2 https://grattan.edu.au/wp-content/uploads/2016/04/871-Peer-to-peer-pressure.pdf
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