Question of Necessity of Insurance for Growing Sharing Economy
As the sharing economy continues to evolve, it’s clear that certain protections are needed for all players, both to build trust in fledgling marketplaces and to compensate should something go wrong.
In fact, as the sharing economy moves from a small “feel good” movement and into the corporate world, where businesses are looking to embrace sharing economy principles to increase customer satisfaction and to become more efficient, insurance is becoming a necessity.
It may be possible for neighbours to amicably work out compensation for a broken tool that’s been shared, but what happens when a car rented through a car manufacturer gets totalled? Or, in the case of Airbnb, what happens when a guest is injured in a property? While Airbnb’s “$1 million Host Guarantee” covers up property damage (exclusions apply), it doesn’t cover the host for personal liability.
The insurance industry, according to Accenture Director Michael Costonis, has much to gain from the rise of the sharing economy. Not only does the sharing economy represents a new $26 billion market to the insurance industry, but he believes it is “perfectly poised” – given its expertise in minimizing risk – to create products that fit the unique needs of the sharing economy.
Crowdsourcing Customer Support to Meet Customer Expectations
One of the ways sharing economy principles have been applied to companies, is by allowing customers to help other customers, or to provide other customers with services. The practice of online forums where customers of a company – for example, Apple, could answer the product questions of another customer, has been around for several years now. This is moving into the physical world as marketplace platforms allow customers to request physical help from other customers. For example, Swissom customers can use Mila to find “Swisscom Friends” to help with tech problems such as setting up Wi-Fi or extending a digital TV box to another room.
Why would companies want to allow this? According to Steven Van Belleghem, marketing professor at Belgium’s Vlerick Business School, there are several drivers.
On the business side, competition has never been more fierce. Whereas a corporate that had clawed its way on to the Fortune 500 might have enjoyed an average stay of 65 years (1920-1950) in the past, now, those years are down to a mere fifteen (2000-2013). Moreover, customer expectation is at an all time high. As Belleghem writes, customers want speed, amiability, a solution in a single interaction – something that the average company finds difficult to do. But the rise of the share economy and mobile platforms makes it much easier. Customers can help other customers, solving problems quickly, whilst also satisfying the need for a more “human” interaction.
Does the question of insurance for sharing economy services appear to you? What does it take in your opinion to offer a good customer service? Share your opinions and experiences with us.
Your Mila Team