Barriers to insurance are stifling innovation and entrepreneurship in the tech industry, particularly in the sharing economy, and the insurance industry needs to respond to its coverage needs.
That’s according to Angelica Ronga (pictured), vice president underwriting, cyber and tech E&O at Canopius Group, who spoke with Insurance Business on the back of her session at RIMS 2023 in Atlanta last month. She tackled the insurance risks and solutions faced by the sharing economy at the annual event.
One only needed to open their phones to see the ubiquity of this innovative model, Ronga said, as Uber, Airbnb, DoorDash, and other companies become household names and a part of many people’s daily lives.
“How many apps in your phone are considered a sharing economy risk?” she asked. “This industry is not going away. I think as an industry, we owe it to these companies to understand their risks because insurance is compulsory, especially on the auto and P&C [property & casualty] side.”
An experienced risk management leader, Ronga is passionate about innovating creative new solutions for the complex risks faced by businesses in the sharing economy.
“What’s so exciting is the chance for innovation through collaboration, to drive new solutions for insurance for these companies,” she said.
“To me, that is what Lloyd’s was founded upon – to have those unique, complex conversations so that companies don’t have to go through the same rigorous process and the barrier to entry [for coverage] for these companies is lower.
“For so many of these companies, the insurance requirements don’t allow them to enter the space and that’s just killing innovation and entrepreneurship.”
For the Canopius VP, the insurance industry has largely “caught up” with understanding the risks that tech start-ups face, whether it’s direct liability, vicarious liability, or regulatory exposures.
“Vicarious liability has troubled insurers and it’s taken time for them to get comfortable with it,” she said. “But I think we’re getting there. It needs to be an ongoing conversation.
"However, Professional and Executive Lines of business who are faced with different challenges, like cyber or D&O, are ironing out the exposure to be able to provide coverage that adapts to the everchanging nature of on-demand companies and their technology."
Ronga also acknowledged that technology is continuously evolving, and insurers and brokers alike need to continuously educate themselves on how platforms interact, what that means for businesses’ coverage, and how solutions should evolve.
"The P&C space is learning how to navigate these waters. For example, we have had trucking and delivery exposure data for years, but it’s not quite the same exposure as that of a Delivery Network Company (DNC) such as DoorDash or Instacart. They are unique and need to be treated as such,” she said.
Canopius for its part, is dedicating time to understanding emerging risks in this space, Ronga emphasized.
“As a specialty insurer and reinsurer, we can get to a lower level of detail here to underwrite these new and emerging risks, not just simply lumping them in with other industry classes and holding them to rates and pricing that doesn’t fit their operating model,” she said.
How can brokers yield the best results for their sharing economy clients? In-depth conversations with both their clients and their carrier partners are a great starting point, according to Ronga.
“How do you elicit the best information to put the best submission out to the market? Does that require involvement from the C-suite? Is it face to face [conversations]?” she asked.
Trust between insurers and brokers is “vitally important” to tackling the evolving risks in the future, Ronga emphasized, as it will “elicit the best out of the client.”
“I think that’s the biggest piece of advice that I could give anyone,” she said. “Collaborate, and you will get something out of it.
What excites Ronga most about working in the cyber and tech E&O space is the ability to challenge preconceived notions on coverage and risk and working with many different stakeholders to shape the future.
“For the sharing economy, we’re all in this together,” she said. “It’s not just the traditional ‘broker places the business’; it’s brokers and carriers looking to create a solution. To me, that’s so exciting because we all get to help and create something sustainable for the future.”
Do you have agree with Ronga’s views on insuring the sharing economy? Tell us your thoughts in the comments.