How to stay relevant in the sharing economy

With one state government set to legalise sharing economy services like Airbnb, brokers’ place in the market remains to be seen

Insurance News

By Jordan Lynn

With one state government set to legalise sharing economy services like Airbnb, brokers’ place in the market remains to be seen.

New South Wales looks set to legalise house-sharing services such as Airbnb following a parliamentary inquiry which found that homeowners should be allowed to engage in short-term rentals without being fined.

The report, released earlier this week, stated that while the insurance market is responding to the insurance needs of consumers, insurance will still play a key role in the development of the industry.

“The Committee finds that landlords should hold insurance to cover short-term letting. Appropriate insurance cover can be purchased from Australian insurers and landlords must hold appropriate insurance cover to be compliant with the Code,” the report states.

“The industry’s view is clear: STRA (short-term rental accommodation) is a commercial activity and consequently, ordinary household insurance does not provide adequate coverage.”

With those using house-sharing services falling onto the commercial side of the industry, Geoff Stooke, joint managing director of Modern Risk Solutions, said that brokers are well-positioned to benefit in the future.

“Brokers will be the problem solvers of this new economic model providing ongoing personalised and tailored insurance solutions,” Stooke told Insurance Business.

“Clearly off-the-shelf direct providers who have highly aggregated ‘one size fits all’ insurance policies will face unique challenges as customers continue to be in a constant state of change and evolution with respect to how they use their assets.

“The challenge for brokers is not their role in the value chain – but ensuring they provide the best available technology for an enhanced customer interface across multiple devices and connected mediums - which will include Internet of Things (IoT) and other connected assets.”

Dr Amy Gibbs, digital communications and content strategy manager for ANZIIF, said that while the advance of the sharing economy does provide an opportunity for the industry, brokers will need to focus on education and a personal approach to help clients.

“To stay relevant, insurers and brokers need to think about what insurance they would want when they personally participate in the sharing economy and act to make those solutions a reality in the insurance world,” Gibbs told Insurance Business.

With the launch of ShareCover, IAG became the first insurer in the Australian market with a house-sharing specific product and James Orchard, general manager product innovation for IAG, said that the sharing economy is here to stay and brokers are “well placed” to impact the market.

“Brokers thrive on strong relationships with customers and partners, so are well placed to adapt and respond to changing customer needs,” Orchard told Insurance Business

“We will continue to work closely with our broker partners to identify opportunities to innovate together and help our customers prepare for the future.”

To find these new clients that will fall into the micro-SME space once sharing economy services are legalised and become the norm, Gibbs stressed that an online presence will be key.

“Brokers will ultimately find sharing economy clients online,” Gibbs continued.

“Brokers need to have an online presence to be visible to the clients that will be using these services, and those clients will expect their broker or insurer to be online and as easy to use and engage with as the sharing services they use are.”

Stooke stressed that for brokers to advise clients in the sharing economy, they will need to understand the nature of the platforms used throughout the market. By getting to grips with sharing economy services themselves, brokers will be able to provide clients with the advice that they need.

“I would suggest the best brokers in this space are the ones who may also be a user or customer too,” Stooke continued.

“There is no better insight into the industry then to actually participate within it.”

Related stories:
Industry set to become ‘even more relevant’
Brokers ‘absolutely’ have a role in sharing economy

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