Meet TUG, the friendly robot assistant to doctors and nurses in hospitals across the world. Aided by 3D navigation, TUG can move around people, things and structures to deliver drugs, supplies and food to patients. It can even call elevators to move to different floors.

Welcome to the age of ‘cobots,’ the newest form of collaborative robots. These robots are finding employment across industries and take on difficult, physically uncomfortable and less-than-safe jobs. IDC estimates that cobot revenues will touch USD 135.4 Billion in 2019, making it the fastest growing segment in the robotics industry.

The intimate connectedness through the use of sensors and cognitive computing also gives rise to potential privacy issues as well as a yawning exposure to cyberattacks. How can insurance companies forge their way forward amidst these challenges?

When Challenges Become Opportunities

The absence of critical mass of data, and inadequate regulatory and legislative guidelines makes matters difficult and complex for robot makers, users and insurers. This results in all stakeholders concerned grappling with newer facets and scale of risks, insurance coverages, and risk management guidelines and solutions.

Each robot-related accident will, for the near future, be a lesson learnt and present opportunities for mitigation solutions. Insurance companies can proactively work with regulatory bodies and robot manufacturers to define, draw up and prioritize areas of controllable and insurable risks.

The gray area in coverage hovers between traditional product and general liability insurance on one hand, and errors and omissions insurance on the other. Besides working with regulatory authorities, insurers will need to step up and become specialized consulting partners with risk managers to re-design safety and manufacturing processes, and ensure that the right contractual controls are deployed.

This is what Rethink Robotics (the creator of the cobot, Baxter) did. The company worked closely with its insurers and designed an elaborate routine to demonstrate Baxter’s safety features– including 360-degree sonar and front-camera for human presence detection, and various mechanisms for collision detection and avoidance. Insurance companies were now convinced of Rethink cobots’ inherent compliance to high standards of safety, and Rethink Robotics could secure standard product liability insurance protection. Rethink thus avoided having to factor the high costs of specialty insurance packages into the price of their products. Their customers were happy too – they had efficient, easy-to-program and relatively inexpensive cobots.

As cobots become ubiquitous, insurers will find multi-dimensional challenges in insuring different applications for different end uses. For example, cobots for surgical applications will need specialty insurance as against industrial cobots performing standard and mundane tasks. Furthermore, at the far end of the challenge spectrum will be fully autonomous systems, where machines will take over the decision-making role from humans.

The Internet and e-commerce industries have shown that the best strategy to manage, drive and stay ahead of change is to be creative and agile. Insurers should keep developing their knowledge, skills and capabilities to wrest the initiative in tomorrow’s fascinating world of automation, robotics and artificial intelligence.

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