... insurers have never dealt with a generation that grew up with the internet and value access to assets more important than ownership of assets. Insurers ignore these societal trends at their own peril.
Northbrook, IL (PRWEB) May 23, 2013
The emerging trend in sharing personal assets – often referred to as collaborative consumption or the sharing economy – is highlighting the importance of an industry many consider old-fashioned in today’s high-tech world, according to a recent whitepaper released by Avarie Capital and Assured Research. Authors Paul Y. Mang and William M. Wilt argue that Property & Casualty insurance will be a critical part of moving the sharing economy into the mainstream.
“Carsharing is just one of the potential applications of this budding social trend for group or community activity. It is evident that a small but emerging segment of the population is willing to share their personal cars in interesting new ways,” write Mang and Wilt. “These new sharing models present both a challenge and an opportunity to insurance carriers.” But how will these carriers respond?
The whitepaper notes that P&C executives are unlikely to be focused on what they perceive as a small segment of potential customers. The lack of concrete data on exposures and risks makes it easy to take a wait-and-see posture. Executives have their hands full with near-term challenges around growth, new technologies, competitive dynamics, and cost pressures. And, regulatory uncertainties make the landscape even more ambiguous – for example, last week’s cease and desist letter from the New York State Department of Financial Services to RelayRides, one of the leaders in the carsharing space, will certainly add to the skepticism.
But interestingly, those same pressures and uncertainties will create the opening for winning carriers to innovate and seize the new opportunity. The consumer segment using carsharing as a real transportation option is small now, but it is growing rapidly in urban areas. These millennials are future profitable customers for carriers. Personal auto insurance is a non-growth sector and the leaders in this environment will have to find ways to insure the risks consumers will have in the future. The Avarie Capital and Assured Research whitepaper describe the strategic lens existing carriers will use to assess the new carsharing phenomenon and the opportunities to innovate in this area.
The paper -- "Insurance in the Sharing Economy" -- is available without charge with a request to admin(at)avariecapital(dot)com.
About AVARIE CAPITAL: Avarie Capital is a strategic advisory and investment firm focused on insurance. Avarie is based in Northbrook, Illinois and works with carriers, distributors, and data/analytics providers across the insurance sector. Paul Y. Mang is the managing partner at Avarie Capital; Paul was formerly a partner at McKinsey & Company and one of the leaders of its North American Insurance Practice.
About ASSURED RESEARCH: Assured Research is a property and casualty insurance research firm with headquarters in Madison, New Jersey. The firm produces industry research analyzing financial, claim, and business development matters of relevance to insurance professionals. William M. Wilt is the founder of Assured Research; Bill has experience as a Wall St. analyst, consultant, and a carrier executive.