Will traditional insurers anticipate the threat from new entrants and/or new partnerships like that between Airbnb and Lloyds of London?
Inflexible, complex and slow to adapt legacy systems should not be a constraint for insurers. Digital platforms can combine the speed of deployment of offered by Slice's or Lemonade's products with the scalability and performance of legacy mainframe systems.
Better still they can do this both for on-demand insurance and longer term products. A complete solution and not just a gig economy solution
However, these opportunities present their own set of risks for the participants. Most insurance policies for homeowners, renters, or personal vehicles, for instance, generally do not cover regular commercial activity, such as renting your home or using your personal vehicle to become a driver. These providers may offer their participants limited coverage, but it may not be enough. When there is a loss not sufficiently covered by the providers such as Airbnb, individual policy holders may be left to assume the risk, which could be substantial. Not surprisingly, new insurance entrants have stepped in to bridge the gap to offer more complete coverage for sharing economy service providers. Slice, which offers homeowners in 20 states an on-demand insurance solution for their home-sharing rental properties. Slice recently began testing its pay-per-use product aimed at drivers, offering their service on ride-sharing services.
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