What Mom Never Told Insurers about the Sharing Economy


Mom always said you’re supposed to share. But sharing doesn’t come without consequence – and in the insurance industry, the implications of the sharing economy are getting bigger all the time.

The sharing economy is growing

Last December, NAIC said that “nearly one-fifth of American consumers participate in some form of sharing economy activity,” according to a PwC study.

According to Cedent CEO Michael Ian Coles, the keynote speaker at the 2017 World Captive Forum, within the next 20 years the sharing economy is projected to reach $300 billion in premiums annually.

As sharing gains traction, new technologies like drones and satellite imagery are going to make an impact on claims management and underwriting. In auto insurance, liability will shift from the driver to the manufacturer. At the same time, the industry will face a new set of exposures: “cyber, political risk, terrorism, product liability, supply chain risk — we haven’t begun to even develop products for these things yet,” Coles said.

As one WCF attendee put it, this year is going to be a major tipping point for sharing – and the industry, which has “reached a standstill” according to Coles, will have to get a lot more agile to navigate a whole new era of insurance liabilities and products.

Where to start? Uber Technologies leader Bus Fuldner identified two places to focus: technology and regulation. “Technology can be deployed to better quantify and manage risk and improve underwriting and claims adjustments,” he said, while regulators “should play a major role in moving toward this future by … testing new ideas and products.”

You have to be agile to share

As the tech guru Richard Stallman said, “Sharing is good, and with digital technology, sharing is easy.” Well, with the right digital technology at least. Sharing is not easy with a legacy insurance software system.

A recent article by Accenture put it this way: “With dozens of new startups entering the insurance industry every year and changing customer expectations, growth is becoming a challenge for carriers with inflexible legacy infrastructures and for small firms without the appropriate resources to make necessary changes and stay competitive.”

The results from their latest survey included gems like these:

  • Half of insurance execs (50 percent) say current tech processes are getting in the way of their business objectives – incremental change will not suffice
  • Six in ten insurers (60 percent) replace their legacy systems every 3-6 years
  • One in ten (10 percent) use no legacy tech at all – meaning you can differentiate yourself from 90 percent of the competition simply by making the move to faster, more robust, more secure technology

Make the move with Silvervine. Agile insurance software doesn’t just make your life easier; it’s essential for keeping up. Download our “Losing Your Legacy” report to learn more.