Robots in the wild

Growing the enterprise’s reach—and responsibility

Companies have already realized the benefits of robotics in controlled spaces, from lower production costs to higher productivity and increased capacity for analytics. Now, businesses are looking at the next frontier for robot technology: the open world. IDC predicts that the global robotics market will reach $210 billion by 2022; only half of that will be in manufacturing, the traditional mainstay of robotics sales.

Advances in sensors, speech recognition and computer vision are combining with lower hardware costs to make robot technology more accessible for companies in every industry, and the rollout of 5G networks is set to unlock new opportunities outside of controlled environments.

As this process unfolds, it creates new risk exposure for insurers to cover, threatens traditional business lines, and opens opportunities for insurance companies to weave robots into their own processes. The migration will take many years, but the impact on the insurance sector, particularly commercial lines, could be profound.

Robotics may introduce new coverage and liability issues in lines such as commercial general liability, product liability, workers’ compensation, and cyber-insurance. The risk profile for employers’ liability and public liability could shift as liability is placed on the robot product manufacturer.

New risks will arise, such as robots in motion causing damage to public or private property or leakages of personal data gathered by robots in homes and workplaces. Some insurance companies may find opportunities to underwrite specialist products for personal and commercial robots.

Robots will not only create new risks—they may also reduce old ones. Many of these devices will do jobs that are not only boring and repetitive for humans, but also potentially dangerous and dirty—for example, lifting heavy items or navigating unsafe environments such as a building after an earthquake. Thus, insurers could see a drop in employee injury claims.

Facilitating the rise of the robots

Finding the right way to integrate robots into organizations and the world includes challenges around talent, questions of human-computer interaction and a testbed that quite literally consists of the whole world—with no boundaries or built-in fail-safes. Insurance has an as-yet underappreciated but vital role to play in ushering in this era of disruption.

By working with robotics manufacturers and enterprises, insurers can help organizations to understand and transfer the risks associated with robots in the wild, in turn facilitating confident adoption of the new technology. Robotics is likely to change the world in unexpected ways in the years to come—and insurance companies can help to make it happen.