HDInsights Edition 7 2022

“ We want to try and reduce the volatility of this huge swing in premiums and rates longer term. You get better outcomes if you can provide consistency .” Apart from market discipline, insurers also need to step up innovation and have products readily available . In a recent article in Insurance Business [see Page X], Mr Tarantino explained that in the sharing economy the customer journey has evolved from what used to be a relationship with a product to a relationship with its use. This has big implications for insurance because the owner of the shared asset won’t necessarily think about taking out the appropriate insurance themselves. “Appropriate insurance products are required to already be at the right place and time - integrated and embedded into the platform customer service,” he said. The primary vehicle for doing this is third-party insurance. Meeting demand for embedded insurance Third-party insurance is a fast-growing area for HDI that has accelerated with over 80 submissions globally since the start of July 2021. The growth in the MicroMobility sharing economy has been enormous according to Mr Tarantino; “As just one example of the sector, I think in 2019 there were only about 700,000 users of E-scooters and by 2024, you're looking at about 4.6 to 5 million users.” This rapidly expanding market needs third-party liability that covers riders of E-Scooters for bodily injury and property damage during the use of the vehicle. Demand for electric bikes is also rising rapidly with estimates predicting that about 130 million electronic bikes will be sold around the world over the next two years. This will – according to Mr Tarantino – call for more innovative embedded insurance solutions. “ Embedded insurance should not be underestimated . The market value by 2030 is estimated to be about $720 billion ." “With 4 billion people connected to the Internet worldwide, we will see more and more peer-to-peer platforms. It's a big market, but also a massive opportunity for insurers and brokers to come up with solutions that help these clients,” says Mr Tarantino. Other examples in the sharing economy market include platforms like Camplify or AirBnB, where the typical set up involves a group policy scheme, with the business platform owner as the policy holder. This allows the users of the platform service coverage under the policy as a beneficiary, according to Mr Tarantino.

Third Party Embedded Insurance “Embedded insurance should not be underestimated,” said Mr Tarantino. "The market value by 2030 is estimated to be about $720 billion. “With 4 billion people connected to the Internet worldwide, we will see more and more peer-to-peer platforms. It's a big market, but also a massive opportunity for insurers and brokers to come up with solutions that help these clients.”

Alex Tarantino Regional Underwriting Manager

Liability and Cyber APAC HDI Global SE, Australia

Big data and the future of insurance claims Mr Tarantino also mentioned the new area of digital assets that are being secured online, for example cryptocurrencies . These also need insurance solutions that protect the user from financial loss if the product fails or if malware harms it for example. Under cyber, however, there isn't property damage per se, as he explains. “Instead, it's more of a financial loss type coverage, so there is no traditional third-party property cover.” Currently, the insurance sector tends to only react around case law on these topics.