The demand for insurance from gig workers, freelancers and sharing economy platforms that power them is ever growing. Whether it’s for legislative purposes (e.g. Prop 22 in California) or as a retention tool, insurance solutions for this category of workers is highly sought after. It’s a difficult, yet highly prized target group for insurance companies around the world because of how quickly it is growing. As the nature of work shifts away from traditional permanent jobs it is a group that can’t be ignored.
Whether a group of people are employees of the same company or a group of freelancers on a platform like UpWork, the need for protection does not change. JAUNTIN’ has worked with numerous gig platforms and thousands of gig workers to customize programs and make the onboarding/distribution of the policies seamless.
JAUNTIN’ makes embedding and distributing insurance both possible and profitable for insurance companies through its various micro services. JAUNTIN’ brings the tech to allow for a 100% automated quote, bind and issue process, but also builds relationships with channel partners.
What better way to prove that embedded insurance is the way of the future by bringing along partners that are already interested in a turnkey insurance solution!
Stats and Opportunities For Insurance Companies to Consider
According to Payoneer more than 70% of freelancers find jobs through online markets and gig economy websites.
A strong argument for embedded insurance. Going after individual workers would not be efficient, however partnering with an online market platform allows insurers to access large groups of users at a fraction of the cost and effort.
According to Forbes and UpWork, the gig economy is expanding three times faster than the US workforce as a whole.
A great argument for insurance companies to strongly consider products that can be a fit for gig workers. This market will be one of the main drivers of growth for insurance companies going forward.
Nowadays, it’s increasingly common to piece together an income from several different sources.
In order to meet this new job style, insurers must create flexible products that can easily adjust based on the users’ needs.
According to SmallBizGenius.net, if the gig economy keeps growing at its current rate, more than 50% of the US workforce will participate in it by 2027.
Another great argument for insurance companies to not ignore this market.
According to UpWork, 41% of postgraduates freelance.
Gig workers are more than just Uber drivers. Groups of highly educated freelancers are quite common and ripe for providing coverage, especially around professional liability coverages.
Mckinsey found that a substantial number of traditional job workers in the US and five other countries would like to become primary independent earners. Meanwhile, according to Upwork’s report, 64% of freelancers say that professionals who are at the top of their industry are increasingly switching to working independently.
Can these new types of workers be better catered to for their insurance needs through technology and rethinking existing insurance products?
According to MBO Partners, the majority of independent workers aim to stay independent. 54% of men and 43% of women earn more money working as freelancers.
Independent work provides flexibility, especially for new parents or those that are caregivers. The insurance industry should enable and support these types of workers.
According to Payoneer, their 2020 Income Survey shows that hourly rates for freelancers fall between $10 and $28 in the most popular fields, with the average income for freelancers being $21.
By linking insurance products to users’ incomes, it makes insurance products more fair, predictable and accessible. As an example, if the cost of insurance was tied directly to the hours worked, it makes the coverage more accessible since the policyholder would not have to commit to a long term policy that usually requires a large upfront capital outlay. Also, there is less risk since they only incur insurance costs when they are working (making revenue).
Millennials will make up 75% of the global workforce by 2025.
Millennials are digitally savvy and expect insurance to be quick and easy like all the other digital services they use. As an insurer, this statistic should dictate which channel partners to focus on and which products are most likely to succeed. Life insurance? Retirement products?
According to MBO Partners millennials and baby boomers dominate the gig work market, comprising 37% and 35% of full-time independent workers respectively.
Another argument for focusing on the gig economy.
How many workers in the US work from home or remotely? Between 20% and 25% of the US workforce telecommutes at least occasionally.
Not all gig jobs are ‘risky’. Many do not involve transportation of people or products.
According to the latest available U.S. jobs data, the largest employer of US gig workers is actually the government/public sector.
Even the government can’t ignore this pool of workers.
According to Wonolo, 63% of workers take part in the gig economy because a portfolio of clients is more reliable than working with a single employer.
Another argument to make insurance products more flexible and link it to wages.
The top US states for remote workers are Delaware, Washington, New Hampshire, Colorado, and Georgia.
Looking to do a pilot? Consider the above states.
According to Pro Unlimited, IT analysis is the hottest industry in the white-collar gig economy.
This opens up opportunities around IT and Cyber coverage, alongside professional and general liability.
The average hourly rate for a legal services expert is $255.
An opportunity around professional liability?
Gig Economy FAQs
What are the highest paying gig jobs?
According to Statista (hourly):
- Software developers — $220
- Accounting/bookkeeping advisor — $215
- Web/graphic designers — $195
- Applied Behavioral Analysis specialist — $195
- Asset manager — $175
- IT strategist — $165.
How big is the US gig economy?
The Bureau of Labor statistics on the gig economy show that there were 55 million workers in this market in 2017. According to the latest and most reliable stats, there are now 57 million gig workers in the US economy, accounting for 36% of all US workers.
Why is the gig economy growing?
There are several reasons the gig economy continues to grow. On one hand, workers, especially younger ones, seem to prefer freelancing over full-time employment because of the flexibility and independence it provides. Non-traditional employment, especially through leading gig economy websites, allows them to choose where, when, and for whom they work. At the same time, companies can benefit from having a flexible workforce; they spend less money on training or recruitment, usually don’t pay for any medical coverage, and can more easily replace their workforce if needed.
What are examples of gig workers?
When the words ‘gig worker’ are used, people tend to think of:
- Uber/Lyft drivers
- TaskRabbit workers
- Airbnb landlords
- Online marketplace sellers
However, the gig economy definition includes all sorts of contingent work, including, freelancers, consultants, independent contractors and professionals, and temporary contract workers.