Let’s get this gig on the road
Let’s get this gig on the road
Publicado por Keith Stonell emAssine nosso blog
The “gig economy” is growing rapidly. Technology acceleration has enabled businesses like Deliveroo to pioneer its working model in the UK. The increasing number of contractor jobs has risen from 1.3 million in 2018 to 4.7 million and it seems that more industries are shifting to an ad hoc basis when it comes to employing staff.
For insurers, this presents a new opportunity to protect workers and employers. Gig economy workers do not necessarily need, or indeed want, to be insured all the time. They need dynamic cover that works when they do. The same goes for those hiring from the gig economy, who do not want to be paying for coverage when it is not being used.
As the spheres of traditional and gig-economy insurance collide, and as technology solutions emerge to accommodate them both, insurers need to combine solutions to suit employers and employees equally.
However, due to terms dictated by current policies, which typically rely on fixed information about employees based on a standard model, insurers have struggled to adapt them for the gig economy.
Parameters for job roles are changing though and not all employees fit a standard model. Contract workers are frequently excluded from basic employment rights like sick days, minimum wage or health and safety insurance and employers are rarely expected to make pension contributions for self-employed staff.
Logistics and manufacturing are traditionally the type of businesses that have benefitted most from hiring contracted consultants, tradespeople and drivers. These industries have had to navigate a distinct lack of standards in insurance for on-demand employment for some time. Meanwhile, modern technology-enabled, high-value remote workers are feeling the pressure to protect themselves against inconsistencies.
The insurance industry can play a positive role here, embracing new technology tools alongside emerging gig-economy job markets to help pave the way to a sustainable working model for them, rather than applying an unsuitable standard.
As larger gig economy employers, such as Uber, address pressures to review their business models to meet the expectations of legislators things are changing. Efforts are now being made by some employers to create comprehensive insurance solutions in-house and via partnerships by leveraging technology.
The US market is leading the way in changing employment regulations with freelancer unions campaigning for better compensation standards for health, disability and unemployment cover. The UK is seeing similar pressure to require companies to address inequalities in employment rights.
Insurers should not neglect the opportunity presented by gig-economy workers. The shifts happening now may lead to a much larger movement from full-time employment to temporary work placements, which offers the benefit of flexibility and income diversification.
Insurtechs are beginning to be recognised as a viable option in providing relevant, innovative usage-based insurance products for the gig economy. Zego, the usage-based vehicle insurance provider, was recently the first UK insurtech to be awarded its own insurance licence to address the problem of long-term vehicle insurance as a default for gig-economy drivers. While the insurance industry begins to take insurtechs more seriously, others like Stripe, which combats slow payment of freelancers, and CoverWallet, an open API which connects usage-based working models to an insurer’s existing technology platform, are emerging on the scene to close the insurance gap further.
Appropriate products that support the gig economy are already in high demand, with 50 percent of independent workers not covered for situations such as unemployment, so speedy delivery to market of new products and related services is crucial. Whether gig economy work provides secondary or primary income for workers, technology will provide the answers to sustaining a fair model as it continues to disrupt the ways we work and live.
This article was published originally in Finextra
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