Collaboration Is Key As Old And New Business Models Collide In Traditional Sectors共享经济,而我仍处于初级阶段n the GCC, is rapidly gaining momentum across the region.

Thesharing economy, whilst still in its infancy in the GCC, is rapidly gaining momentum across the region. This growth is an encouraging sign that the region's investment to become a tech- and innovation-friendly environment is paying off. For traditional business sectors, however, it also represents a significant challenge. For most, their business models have been able to evolve and adapt over long periods of time, and until recently this was perfectly acceptable– but this is the age of digital disruption.

Insurance companiesare certainly among those which need to move with the times– ours is a sector which is not renowned for technological innovation, but which now must quickly adapt in order to meet the changing face of demand. Those businesses which are complacent will soon find themselves left behind, selling services which are no longer fit-for-purpose.

The sharing economy has seen particular growth across five main industry sectors: transport, financial services, household services and accommodation. A report by Strategy& found that in 2016, more than US$10.7 billion was spent on sharing economy platforms across the region, mainly in theUAE.For companies working within this business model, flexibility is key. For example, they might typically be expected to include on-demand or pay-as-you-use micro cover in response to the growing number of peer-to-peer, small scale, or short-term transactions. While meeting these changing needs is, of course, a major test to the status quo, it also represents a future opportunity for insurance companies that take an innovative approach.

The concepts ofinsurtech and digital disruptionare impossible to ignore for insurers if they want to stay alive– and this demands an ability to introduce new products and innovations at a pace previously unthinkable. It's little wonder that insurtech has ruffled feathers among traditional industry competitors, but those who resist change will most certainly pay the price. So how should the sector respond?

I believe both insurers and startups will need to change their collective mindset and approach to extract maximum value from working together, and to overcome differences in culture, workforce, agility, and technology. From a recent roundtable debateAIGheld for key industry leaders to discuss the challenges and opportunities facing business in the UAE's sharing economy, it was highlighted how this region already has the key ingredients in place needed to ensure a successful sharing economy.

The UAE is highly urbanized, with a population that is largely tech-savvy. Importantly, customers are already reacting positively to the services on offer. An important point which was noted is that sharing economy platforms capture far more data than traditional companies do. They are able to provide a more accurate, real-time measure of the risk exposure looking forward, which is naturally an advantage for insurers to design better-fitting products and mitigate risks more accurately. This represents a huge opportunity for insurance companies to develop solutions, which truly respond to the needs of these fast-moving markets.

One significant challenge when it comes to insuring within the sharing economy, is how personal and business lines of insurance can become blurred. Creatingnew, innovative insurance productsfor these markets will require close cooperation and risk expertise from across the personal (personal auto and personal insurance) and commercial (public liability, professional liability and employer's liability) areas. Insurers therefore need to develop the overall innovation agenda within their business models, and then determine where startups or the sharing economy sit within it.

Traditional businesses need to embrace innovation as part of their everyday businesses, and this means it needs to be embraced by everybody in the organization as part of the corporate culture. The sharing economy may only be in its infancy here, and its effects on many industries are yet to be fully understood. However, it's clear from our observations and discussions that we need to find a common ground between traditional business models and those which are only just emerging.

For insurers, a clear understanding of which parts of a company's offering requires cover is key. For those insurance companies which are up to the challenge, and which are able to rethink some of their products to suit the sharing economy model, I believe there are exciting times ahead. As a global leader in the insurance sector, AIG is committed to strong collaboration with sharing economy businesses, and our experience to date has been overwhelmingly positive and fruitful. Companies in the sharing economy sector are keen to engage and be listened to because the resulting solutions will be a win-win for all stakeholders, asold and new worlds come together.

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