New ways of working, new solutions: how revolutionising insurance will futureproof the gig economy

Russell Corbould-Warren
Chief Underwriting Officer
Collective Benefits

Being invited to speak alongside experts from Uber, Zurich and Wolt at the biggest Insurance Tech conference in the UK? We didn’t need to think twice! This month, our CUO Russell sat down to talk all things insurance and the gig economy at Insurtech Insights - to find out more, read on:  

What is the current relationship between the gig economy and insurance? 

Today, you’ll find gig workers in almost every industry. From the person who dropped off you and your takeaway last Friday night, to the barista who handed you your coffee fix this morning, right through to the construction workers levelling up our cities and the carers looking after our loved ones, we all come across gig workers in our day-to-day lives. 

The sector is due to grow by 300% in the next three years, and it’s poised to have a workforce of 43 million in the EU within the same timeframe. In the last few years, the sector has received over $2Bn in funding. 

However, this rapid growth has led to new challenges in all areas as gig workers have unique needs and, as digital natives, so much of their lives is run from a mobile phone. Recent debate about the working lives of gig economy workers has led to pressure on platforms from all sides, with the European Commission making proposals aimed at overhauling working conditions and protecting workers in December 2021. 

Similarly, the ‘tools-of-trade’ that these workers depend on are used in new and innovative ways and their financial outlook presents new risks. 

Even aside from the complexities of the EU regulatory landscape, insurance will have to fundamentally adapt to this new, soon-to-be majority workforce - from what policies actually cover to how cover is communicated and especially how to make a claim.

Insurance is ideally situated to provide the protections needed - but first it needs to innovate.

What does the gig economy need from insurance? 

Traditional employee benefits insurance products are centered around companies with conventional employment models, typically with a large white collar workforce. These insurances are industry standard and generally well understood by companies and the employees alike.  

Employees are also entitled to statutory benefits that all employers are required to provide. They can expect to receive a paycheck at the end of the month - regardless of time taken off due illness, injury, the birth of a new family member or the death of a loved one. A lengthy claims process or long payout time may be annoying for a white-collar workforce, but it probably won’t significantly impact their lives. 

Now consider those working in the gig economy. It’s a more complex demographic: they might not be communicating in their first language, and might be unfamiliar with the claims process. They’re constantly on the go, and often work long hours and demanding shifts to get their jobs done. Importantly, if they don’t work, they don’t get paid - so waiting on a lengthy insurance payout time can have serious financial consequences.

The platforms that work with these workers also have completely different needs to a traditional corporation. These companies are growing fast, and might be the first to be doing what they’re doing - they need insurance that is suited to their unique business models and scaling plans. 

So, how can insurance meet these needs? 

First up, let’s consider cover. Gig workers need specialised cover that suits the type of work that they do, with long shifts out on the roads. They need to be protected from an increased risk of injury, illness and mental health problems, be able to get new protective equipment if theirs gets broken, and be financially covered if someone else is injured or someone’s property is damaged in an accident. 

Next, the claims process. Gig workers need a claims process that’s quick, easy to understand and can be done from anywhere. They might need support on making a claim, and, so they can keep on top of their finances, they’ll need to be able to see the exact status of that claim and have someone to chase it for them if need be. Having a seamless experience, that can be accessed from the palm of their hand, should be the new normal for insurance as the gig economy advances. 

And what does it need to do for platforms? 

Of course, we need to consider that organisations in the platform economy are growing - fast. As small businesses become large, multi-country corporations, they need insurance that can be deployed seamlessly across new markets, and adapted to suit the changing needs of a growing workforce. 

Differential pricing is also key to insuring the gig economy. Pricing schemes that are built to cover this specific type of work are essential - platforms will only want to pay for when their worker is on shift, and choose from policies so they’re only paying for the coverage their business needs. By making pricing affordable and flexible, platforms are far more likely to adopt insurance for their gig workers. 

Is insurance currently meeting these needs? 

Outside of traditional insurers, bigger gig economy companies are coming up with their own solutions, and insurtechs such as Collective Benefits are also building products for the new world of work, and using data in new, innovative ways. For example, we use data to inform the rest of the products we create. This then wraps extra rings of support around the worker. By driving towards more protections for gig economy workers, the definition of protection expands and gig workers become, by proxy, safer. 

Data is key to the transformation of modern-day insurance - this is an approach that needs to be adopted throughout the industry in order to meet the needs of the gig economy. 

Looking to the future - what still needs to be done? 

The gig economy’s needs are not completely being met by insurance. There are still obstacles - surrounding risk, compliance, privacy, and data - for the industry to overcome.

Going forward, more solutions need to be created. We may have protection for illness and injury available, but what about holiday pay and savings? These may not be as much of an immediate need, but are no less vital to the physical, mental and financial health of the gig workers that we all rely on. 

When it comes to insuring the gig economy, there’s still plenty more for the industry - from traditional insurers to insurtechs like ourselves - to do. We’re excited to be spearheading that change. 

Want to learn more about what workers need from insurance? Click here.

March 29, 2022