UberX and AirBNB can create vulnerabilities for p&c insurers, panel hears

Emerging technologies provide convenience to the public, but can also create vulnerabilities for property and casualty insurers, suggested Jad McGregor, president of Waterloo, Ont.-based ABEX Affiliated Brokers Exchange, during a speaker panel and reception last week.

“It’s kind of a double-edged sword because we want these emerging technologies to create convenience for us and make life easier and better, but the existing bureaucratic systems in place fight it and the governments fight it,” McGregor said during the session, titled P&C Insurance and the Sharing-Economy: Exploring Implications of UberX and AirBNB and hosted by the Young Insurance Professionals of Toronto.

McGregor noted that evolving technology creates conveniences for the public and both UberX and AirBNB “represent that to a tee.” UberX connects riders and driversthrough a mobile app, while AirBNB allows people to rent an entire dwelling (or part of it) from a host. But these two transportation network companies (TNC) are “very disruptive for the existing industries,” he stressed.

There is also a cyber exposure risk, McGregor (pictured right) said, relating to how and what data, if any, is kept by these companies. This could include profiles of every Uber passenger and driver, as well as profiles of AirBNB renters or rentees. “From that perspective, they are housing personal, identifiable information so they do have some form of cyber exposure,” he said during the panel discussion.

Another panellist, Jason Arbuckle (pictured below), vice president, program specialist Canada/USA with Gen Re in Toronto, suggested that claims adjusters ask “Were you working with TNC or not” when there is an accident. “The reason why is either you’ve got another potential claimant or you’ve got a witness,” Arbuckle said. “It’s one of those questions you just throw out there right now and then you can decide which way you need to go,” he said. Arbuckle also recommends the contacting of outside counsel whenever a claim comes in.

From an AirBNB perspective, whether or not it is incidental is key, suggested the third panellist, Tara Saunders, vice president, personal insurance with Toronto-based Chubb Insurance Company of Canada, using the example of a one-time property rental for the upcoming Pan Am Games. “To me, I think that could be a personal lines exposure that we could talk out. But if I’m looking at this in terms of an income situation, where I need to rent my place for a long time in order to survive… that to me blurs into a line a little more appropriately in the commercial space,” she said.

For AirBNB, Saunders (pictured right) recommended asking “is it your whole home? How long are you renting? Is it just a room? Just a couch? What security measures are in place? How often are you renting it? Who are you renting to?” In conclusion, “if it’s incidental, we try to find coverage. If it’s… to pay my bills, then maybe we’re not the right market to contemplate it,” she suggested.

McGregor reiterated that these emerging technologies are creating conveniences, but also new vulnerabilities that people don’t necessarily think about. “And I think the big issue with underwriting both of these things is: are people actually thinking about the risks that these products bring out?”