Sharing Economy, New Technology Pose New Questions for Insurers

Emerging risks associated with the sharing economy and new technology pose new challenges for insurers, according to members of the International Association of Claim Professionals (IACP) who sat down with Claims Journal for an exclusive interview.

Marc Karnell, global head of insurance claims and technical director at Endurance Services Limited, cited new engineering and product exposures related to medical devices.

“For a company like Endurance, one of the problems we have in the sharing economy, is that the types of claims that used to impact one of line of business, are now impacting many,” said Karnell. “”All lines of business are being impacted from a single type of claim and we’re going to have to watch those aggregations.”

Insurers need to start at underwriting, said Alex Sardinia, executive claims officer for Markel North America, when evaluating new risks.

“Really it starts with understanding what those risks are or…are not and how they impact how we’re going to handle claims and how coverage is going apply,” Sardinia said.

He explained that underwriting and claims need to maintain communication so that the claims department understands how coverage will apply.

Sandra Van Enk, senior vice president and head of Americas Treaty Claims at SCOR Reinsurance Company and past president of the IACP, said that good communication is key between claims and underwriting.

“That means communicating back what we’re seeing and hearing from our ceding companies about the potential exposures, assisting with potential contract wording issues – both on the policy side and the reinsurance contract side – as well as making sure that we know and understand what they intend to write in the future, so we can prepare and hire and train the right people on the claims side,” Van Enk said.

Because insurers don’t have a good handle on future exposure, education is key in making sure good communication is in place, said Scott Kellers, head of Syndicate and Reinsurance Claims for London-based Liberty Specialty Markets.

Pete Fennell, managing director of Aon Benfield and immediate past president of the IACP, echoed other panelists when he said that future exposure will be hard to assess. He offered the example of Uber, which doesn’t consider itself to be a transportation company but rather a software company.

“Are they? How does that get insured? Who’s paying the claim if there is a claim? Airbnb just got sued recently for discrimination. Is it Airbnb’s liability? Is it the homeowner’s liability? This is a really gray area right now,” Fennel said.