According to recent survey findings by GlobalData, companies in the sharing economy continue to be widely embraced by consumers. These platforms are now taking a key role in transforming the insurance landscape, particularly by integrating insurance products directly into their systems, enhancing convenience for users. A notable example is Airbnb’s collaboration with Generali in the United States, offering travel insurance directly through its platform. This partnership underscores the disruption in traditional insurance distribution channels, as embedded insurance becomes a growing trend.
GlobalData’s Q3 2022 Global Consumer Survey revealed that 5.4% of U.S. respondents used short-term rental accommodations, including platforms like Airbnb, Vrbo, and onefinestay, during their most recent vacations. While the rise of the sharing economy has undeniably impacted the travel industry, traditional booking methods, such as hotel chains and resorts, continue to dominate the majority of bookings.
The insurance industry has long been criticized for its slow pace of innovation and lack of focus on improving customer experience. Meeting the needs of digital-savvy consumers, who frequently rely on online platforms, has proven particularly difficult for many insurers. These consumers expect smooth, streamlined experiences similar to what leading tech companies and sharing economy platforms offer, leaving insurers under pressure to improve their digital offerings.
One promising solution is for insurers to form partnerships with sharing economy platforms, integrating insurance options directly into their services. This not only enhances the customer experience but also simplifies the process, allowing users to easily purchase insurance at the time of booking accommodations. However, for insurers, this convenience comes at a cost, as marketplace platforms act as intermediaries.
As the sharing economy expands, more insurers are likely to follow suit and collaborate with digital marketplaces to tap into this emerging opportunity. Currently, Airbnb’s travel insurance is available to U.S. users, but the company plans to extend its offering to several European countries, including Italy, Germany, Spain, and the UK. The coverage includes full refunds for trip cancellations, compensation for travel delays, lost luggage, and medical expenses abroad. Other short-term rental platforms are expected to adopt similar models, incorporating insurance for their users directly into their platforms.
This growing trend of embedded insurance within the sharing economy signals a shift in how insurance products are distributed, with partnerships between insurers and digital platforms set to play an increasingly important role in the industry’s evolution.
