Affordable, Appropriate and Accessible: How We Completely Rewrote Income Protection for the Flexible Economy

Rewriting income protection for the flexible economy

Since the way we work is changing, we think insurance should too. For businesses and their ever-growing flexible workforces, we believe it’s crucial to ensure better protection for all. And that’s exactly what we set out to do.
Sean Rowley
Head of Financial Products
Collective Benefits

The way we work is changing. And whilst we’ve all had to adapt to new patterns, schedules and set-ups, we don’t just mean working from home. Here at Collective Benefits, everything we do is built around a far more fundamental shift - that is, the rapid rise of flexible workers.

Alongside a proliferation of on-demand or ‘gig economy’ platforms over the last decade, even once traditional businesses are now adopting more flexible models and recruiting talent on a remote basis. Individuals too are redefining their own means of employment, demanding greater flexibility and control of their working lives. A result of these emerging trends, the self-employed segment of the workforce is growing, and fast. Estimated to make up 20% of the labour force by just 2025, there’s a pressing need for companies to understand and address the particular needs, patterns and practices of this unique and ever-evolving group.

Since the way we work is changing, we think insurance should too. The future of work relies on the health of its workers. For businesses and their ever-growing flexible workforces, we believe it’s crucial for the industry to keep up with the times to ensure better protection for all. And that’s exactly what we set out to do.

Time for a complete re-work

The self-employed fall outside of traditional models of insurance. There’s a mismatch between what independent workers desperately need and what the industry currently offers. Personal insurance products are often difficult to purchase, with long forms and tricky demands, and they generally cost more than independent workers are able to pay. So, is it any wonder that 96% of the UK’s self-employed have no income protection, whilst 93% are without any health insurance or critical injury cover?

What’s more, Covid-19 has placed a magnifying glass over the unique issues facing the self-employed. Acutely vulnerable, flexible workers face greater physical and financial risk than their peers in traditional employment. Research from Standard Life Foundation found that households relying on income from the gig economy were three times more likely to encounter serious financial difficulty. Indeed, there has never been a more precarious time for the self-employed than now. Flexible workers need income protection as a matter of urgency. That is, income protection that’s affordable, appropriate and accessible to the UK’s ever-growing self-employed population right now.

Something needed to change.

The challenge ahead

Although the long term disability income protection market is well-served to insure individuals against low frequency, high severity events, such as severe personal illnesses or accidents that prevent working for a prolonged period, the same cannot be said for short term illness protections, such as sick pay. A lack of risk appetite among insurers to offer these products on an individual basis has left independent workers alone and ill-protected, constrained by high prices, complex screening procedures, restrictive terms and conditions, or in many cases - a combination of all of three. Whereas buying as a group mitigates a lot of this risk, independent workers have no "group" to aggregate or pay for them.

Herein lies the opportunity for on-demand platforms to step in and address the widening protection gap of this underserved niche. 74% of independent workers say their ideal benefit would be income protection in case of injury or illness, yet only 15% are financially in a position to access these policies. From the likes of Uber to JustEat, there’s a growing movement of on-demand platforms recognising the need to better support their self-employed workforces, offering greater benefits and protections to do so. By stepping in to provide this support, forward-thinking companies are securing the health of both their workers and their bottom lines. Amidst a global talent crunch, putting the systems in place to build happier, healthier and more engaged workforces has proven to improve worker loyalty and in doing so, reduce churn.

So, in order to better deliver on the needs of flexible workers and their on-demand platforms, earlier this year we worked to fundamentally reimagine our flagship Time Off Work product for the better with far greater flexibility, affordability and ease of use than our initial iteration. In less than 6 months, we designed a product that provides the self-employed with financial cover for sick and injury pay, family and compassionate leave. Purchased through a wholly digital experience and claims journey, and without any underwriting questions, individuals can be protected with just a few clicks and within just 30 seconds.

Creating a whole new market is a sizable challenge. To help fulfil our ambition to create first of its kind income protection for the flexible workforce, we called on the expertise of global reinsurer, Canopius.

Going further with Canopius

With the support of Canopius, we utilised data and insights from discussions with our members and gig platforms, alongside our learnings from the product’s first iteration to deliver a truly innovative solution. We designed Time Off Work exclusively with flexible workers in mind to address their unique spectrum of needs. We’re proud to be the first and only insurers in the market to;

  • Introduce and offer family and compassionate leave to this niche, underserved market
  • Provide fixed daily benefit regardless of historic income levels, accommodating gig workers’ variable income and hugely
    simplifying the overall claims process.
  • Cover flexible workers not just for shorter term sickness and injury but also longer term critical injury.
  • Ensure greater flexibility in benefits and cover levels, better structuring solutions to meet our members and partners'
    needs in terms of cover and budget.
  • Create specific versions of the product so that more industries and occupations can be covered.

At Collective, we set out to reimagine insurance for independent workers by bridging the gap between the two. “Combining our expertise with Collective’s market insights has opened up the ‘gig economy’ and other types of flexible work, allowing us to create products fit for a whole new working population” explains Lewis Katelely, Accident & Health (A&H) underwriter at Canopius. “Our industry has historically struggled to adapt to the changing dynamics and technologies of the workplace but by partnering with connected digital platforms, such as Collective, we can now create and distribute policies more efficiently, which ultimately means more cost-effective insurance products for the end user.”

By rebuilding Time Off Work to be more flexible, intuitive and transparent, our solution is better suited to the needs of these on-demand platforms, thereby increasing access to income protection for a greater number of independent workers - that is, income protection that’s affordable, appropriate and accessible to this community for the very first time.  

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May 18, 2021