Lloyd’s survey shows sharing economy held back by risk fears

With only 16% of consumers worldwide actively using sharing-economy services, such as Uber or Airbnb, Lloyd’s said consumer mistrust in the new business model and differences of opinion between consumer and commerce over who should mitigate its risks, has limited the sector’s growth. In a new report accompanying the survey, Lloyd’s added that insurance cover could offer greater reassurance and boost the market. The risks of using services offered by sharing-economy businesses, where the lines of liability are often blurred by the use of technology platforms to share assets or services with users, are considered too great for the majority of consumers, suggests the new survey by Lloyd’s. “The sharing economy itself created a new risk landscape, with many untested assumptions around who should be managing risks and liabilities,” said Trevor Maynard, head of innovation at Lloyd’s. Users in the UK and US are particularly sceptical of sharing-economy services. The survey found that 58% of UK and US consumers said the risks of using sharing-economy services outweigh the benefits. The report found more confidence in sharing-economy services in China, where 68% of consumers surveyed said the benefits outweigh the risks. The survey of more than 5,000 consumers and 30 sharing-economy companies found concerns about personal safety are the main deterrent for users, cited by 52% of respondents, followed by quality of service at 42%, damage to assets at 42%, theft at 40% and lack of safeguards if something goes wrong at 38%. Despite the benefits of shared-economy services, which promise greater flexibility and affordability, Lloyd’s said conflict over liability between the three parties involved has added to consumer concerns. “The question over who is ultimately responsible when something goes wrong can be left hanging,” Lloyd’s said. Some 71% of respondents said they would be more comfortable with sharing-economy services if insurance was offered and 70% said they would be more likely to offer a service or asset if insurance was in place. However, there is disagreement over who should provide this protection. More than half of consumers (53%) said the sharing-platform business should provide cover. This conflicts with sharing-business platforms, which said consumers (53%) or service providers (27%) should provide the cover. The provider is the asset owner or service provider, while the sharing platforms are delivered by computer software companies. Vincent Vandendael, Lloyd’s chief commercial officer, said: “In our work with sharing-economy platforms, we’ve found that insurance not only protects against financial loss, but also enables growth. By instilling consumers with confidence by clearly defining and protecting against risk, insurance can help remove barriers to engagement in the sharing economy.” He added that new forms of insurance protection to cover the unique risks of sharing-economy businesses, in particular intangible assets such as intellectual property, would support the sector’s growth. “There is no doubt shared platforms are growing at a lightning pace, so it’s important that the insurance products created for these companies are able to grow and change with them – from a ten-person startup to a global disruptor,” he said.

Lloyd’s survey shows sharing economy held back by risk fears

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