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problem straight away with claiming on an insurance policy. “Secondly, if it is legal, then is the provider fully compliant with safety regimes? This is an important threshold. “Awareness needs to be raised so people are not unwittingly providing a service that is not legal or compliant.” The issue then is whether a retail policy would respond in the event of a loss. “This will come down to the particular policy, but it may not respond if a domestic asset is being used for commercial purposes, particularly if the activity has not been disclosed.” Ms Mullen says ICA does not see the development of the sector as negative, and it could lead to opportunities for insurers. “What [the sharing economy] enables people to do is unlock domestic assets for commercial purposes, and that is very attractive. It is an issue for insurers how they respond, but this is clearly a potential market opportunity. “It’s taking off in a huge way in the US and Europe and I would expect Australia to follow. It is a matter for consumers to keep talking to insurers, but it is also a case of supply and demand. “If the business is compliant then that supports consumers with choice. There should be a level playing field regardless of who is providing the service.” However, Allianz General Manager Corporate Affairs at Nicholas Scofield believes everyone is getting a little carried away with the concept. “There is a perception in various quarters that anything the internet or social media can deliver in terms of communicating and engaging is good, and a sign of just how the internet is benefitting communities,” he tells Insurance News. “Sometimes not much attention is given to how some of these sharing platforms fit into the real world and the legal and contractual framework.” Mr Scofield says the belief that there cannot possibly be a downside leads to insurance being overlooked, despite the fact that participating in the sharing economy will insuranceNEWS

February/March 2015

inevitably have a significant impact on cover. Motor policies usually will not respond to damage that arises from using your own vehicle for ride-sharing services, he says. “Our product disclosure statement says claims will not be paid if passengers are being carried for hire, fare or reward, unless it is under a private pooling arrangement.” And home policies will generally not respond to damage caused by people invited in by the homeowner. “People think, ‘It’s new, it’s innovative, isn’t it good?’ But there are potentially very significant issues arising out of this. “In principle, people have freedom to use their own property in any way they see fit, but that doesn’t mean there aren’t legal implications, and implications for things such as insurance. “If people are going to participate in these things they should certainly make themselves aware of the implications. “There is a duty of disclosure. If there is a change in use then the insurer needs to be informed. Policies might be able to be revised and additional premium paid for additional risk.” Mr Scofield believes an element of naivety exists, which could lead to tragedy. Just because you can talk to people on social media does not make them your friends, he says. “There’s a big bad world out there. Pooling with family, friends or neighbours is one thing, but you are usually participating in this activity with total strangers and getting into a car with someone you’ve never met. “Young women have been assaulted by taxi drivers in the past and this is a grey world of people not under any monitoring or control. “Some of these things provide an open door for people who want to harm or rip people off.” But Mr Scofield accepts the trend is only likely to continue – and insurers must stay on top of it. “There may be opportunities for new products. Whenever there is a gap in the market, then insurers will monitor, investigate and look at whether there is an 43

Profile for Insurance News (the magazine)

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