CoverBuilder is the latest player to target the emerging insurance space created by the sharing economy. It has launched a new Home Hosting product specifically targeted at individuals who host guests at their property via home-sharing platforms such as Airbnb, covering property and possessions against damage, theft, and vandalism by short-term guests, explains GlobalData Financial Services

The company suggests it is one of the first in the UK to introduce such a policy, and specific policies around home-sharing do remain quite sparse.

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Insurance is more established in other parts of the sharing economy, however, with ride-sharing policies being more common. Such policies have been launched by leading insurers including Zurich, Allianz, and AXA, as well as start-ups such as Metromile.

Admiral is one leading insurer that offers a specialized host insurance policy at present, while Zurich underwrites Airbnb’s cover.

Statista estimates that Airbnb currently has 36.8 million customers, which it expects to rise to over 60 million by 2021.

It is likely that, among the increasing number of hosts, there is a potentially large market in need of both the cover itself and education around it, such as the fact that many traditional home insurance policies are invalidated by renting out the home.

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With the emergence of the sharing economy has come a total disruption of the traditional view of risk, or how an insured possession may be used. As this has developed, the task to offer a comprehensive proposition to all customer needs has become far trickier, and in the gaps that are being created are opportunities for new, specialist players.

The questions for incumbents, as the emergence of CoverBuilder’s product shows, are two- fold.

First, a decision should be made about whether to develop expertise in new areas of risk in-house, or to embark on a new level of third-party partnerships.

Second, is how to effectively and clearly articulate a menu of cover options to consumers – requiring new approaches to interaction and on-boarding.

Perhaps the greatest challenge for insurers is to create a simple digital policy to match the expectations that Airbnb participants will have become used to.