Home-sharing services haven’t attracted as much insurance innovation as ride-hailing services—and there’s room for traditional insurers to seize the opportunity.

Home-sharing services can run the gamut from renting a room in someone else’s apartment, to renting an entire home or apartment, to renting castles and villas. According to a recent report from the Pew Research Center, 11 percent of American adults have stayed overnight in a private residence that they booked through a home-sharing site; 34 percent are familiar with such services but have not used them; and 53 percent have not heard of these services before.

53 percent of americans haven't heard of home sharing at all

Consumers see home-sharing companies as software providers

Like with ride-hailing companies, the Pew report found that home-sharing users see their service providers as software companies. And, similarly, users expect the home-sharing company to take some responsibility for the customer experience. Liability was not part of the Pew study, but it would be interesting to know whether users see liability as resting with the host or the home-sharing service (or perhaps a mixture of the two).

On innovation—or the lack thereof—in home-sharing insurance

In general, there appears to be less innovation in insurance products for home-sharing services than ride-hailing services. AirBnB’s $1 million host guarantee is underwritten by Lloyd’s of London, but as outlined in this New York Times article, it functions as secondary insurance to a homeowners’ primary policy—and in many cases, home-sharing qualifies as a commercial activity that is not covered by a personal policy.

Some start-ups have tried to address the gap in home-sharing insurance with on-demand host insurance, but none have emerged as the frontrunner—and in fact, several have folded within the past year. This may be a case of incumbent insurers having advantage with rich underwriting data and, arguably, stronger risk management capabilities. To wit, earlier this year Allstate announced it would roll out home-sharing coverage in six states.

The sharing economy will continue to evolve

It’s hard to say what’s next for the sharing economy. One thing is certain: the sharing economy isn’t going away any time soon, and there are still opportunities for insurers to win market share with the right mix of innovative, personalized products.

Learn more:

  • Email me to discuss how Accenture can help insurers develop innovative, personalized products for the sharing economy.

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