Insurance would boost sharing economy

The introduction of business insurance protection will allow sharing economy platforms in China to flourish, according to industry specialists.

China’s sharing economy is developing rapidly as the government promotes the use of technology to leapfrog the brick-and-mortar economy.

Since assets in the sharing economy are fragmented — as they are owned and shared among various parties — many sharing economy platforms in China are considering whether to provide business insurance solutions for their services so that consumers can feel more confident in adopting sharing services.

A survey by global business insurance specialist Lloyd’s revealed that 81 percent of Chinese consumers would be more comfortable using sharing economy services if insurance was offered, and 78 percent would be more likely to consider sharing or offering a service if insurance was offered. Around 82 percent of Chinese providers believe they would get more customers if insurance was provided.

The survey interviewed 2,000 consumers from the United States, 1,000 interviewees from the United Kingdom and 2,000 respondents from China. It also surveyed representatives from 30 sharing economy companies.

Chinese consumers appeared somewhat more optimistic, with 68 percent of those surveyed believing that sharing economy platforms bestow greater benefits than risks. Generally speaking, 52 percent of respondents cited concerns over personal safety, followed by quality of service and damage to assets (both with 42 percent), theft (40 percent) and lack of sufficient safeguards if something goes wrong (38 percent), the Lloyd’s report added.

“Many consumers and service providers say they will make much more use of sharing economy platforms if the services are insured regardless of who provides the insurance,” Lloyd’s Chief Commercial Offistick cer Vincent Vandendael told China Daily in an interview.

“Insurance removes uncertainty and creates a more certain environment for consumers and providers, which will help grow the sharing economy significantly,” Vandendael added.

One example is the bicyclesharing industry in China. Theft, vandalism, illegal parking and misplaced bikes are all common problems confronting the industry and the country is home to more than 40 sharing bicycle startups.

The market value of China’s sharing economy sector grew 30 percent to reach 4.5 trillion yuan ($680 billion) last year and is expected to maintain annual growth of about 40 percent over the next few years, according to the State Information Center, a think tank affiliated with the National Development and Reform Commission.