The gig economy is growing at a phenomenal rate that shows no signs of slowing down
This is according to a new report put out by BMO Wealth Management this past week. They define a gig as “any job, especially one of short or uncertain duration.”
Staffing organizations with short-term workers allow employers or even just everyday people looking for someone to fulfil a task or job, to hire a worker on an on-demand basis. These gig-workers usually posses special skills and can quickly jump in and out of projects as needed.
Many gig-workers (or freelancers, temporary workers, contractors, handy-people – they have a multitude of names) are looking for gigs on platforms such as TaskRabbit, Hyr, Handy, or even Craig’s List and organizations or individuals can post the gigs they need done on these platforms to connect with these workers.
The BMO report, which also surmised that part of the emergence of the gig-economy stemmed from the 2008 financial crisis, found many interesting statistics on gig-workers, including:
• By 2019, they could make up as much as 50% of the workforce. (This number includes many self-employed individuals as well, who now consider themselves as part of the gig economy.)
• In 2016, almost a quarter of gig-workers (23%) were under the age of 25, while 8% who were 65 or older.
• About one-third or 27.6 million out of 85 million U.S. households have at least one partner employed part- or full-time in the gig economy.
While the report outlines why people may choose to work within the gig economy, they also mention some of the downfalls, and where gig-workers need support and new products to help them achieve financial wellness.
Survey results showed that gig-workers’ three biggest challenges are:
• Having no benefits (such as medical, dental or disability) – this was the biggest challenge (cited by 69% of respondents).
• Not getting paid when sick (48%).
• Not earning enough (43%).
One of BMO’s recommendations to gig-workers to achieve financial wellness is to protect themselves against risks should they not be able to perform their work.
This should be looked at as a direct call to action and opportunity for insurers.
Aside from not earning enough, insurers can be the solution providers to this emerging workforce and help them achieve financial wellness while building a new customer base. Providing them with insurance products that can protect their policyholders in the same manner that the policyholders secure their gigs – on-demand. While current products and legacy systems may not be able to support such a shift in offerings, there are insurtech companies, such as JAUNTIN’ who can connect gig-worker platforms to insurers, and be the delivery vehicle to reach the gig workers and satisfy their needs for financial security.
The market is opening to insurers.
According to the BMO report, employers estimate almost a quarter (22%) of their workforce is working virtually or remotely, and they see this trend growing to 33% by 2025. Sixty-eight percent of the companies surveyed in the report foresee an increasing move to a freelance workforce in the near future.
There are new players joining the insurtech market at an increasing pace, vying to solve the problem of gig-workers’ coverage on an on-demand basis. These incumbents want to disrupt the insurance industry.
Established carriers will need to begin to evolve their product offerings to compete with these new players and tap into the gig economy using their trusted and established brands. By partnering with market-ready companies, such as JAUNTIN’ they will enter into the on-demand space as soon as possible to acquire new customers in this expanding market.
For more statistics on gig-workers and the gig-economy, download and read the report:
https://wealth.bmoharris.com/insights/professionals-executives/plan/gig-economy/.
To learn more on how JAUNTIN’ can enable insurers to provide on-demand insurance to their policyholders, while still leveraging their own branding, please reach out to us at www.jauntin.com.