Insuring The Gig Economy: How Insurers Can Survive The Shift

Health benefits for the gig economy are now available through BasiCare Plus. No copay, no deductibles, no claims to file, and no charge to add spouse/dependents.

The gig economy has not only changed the way in which individuals are working but is also changing the way in which they need to be insured. This article will discuss how insurance providers can adapt to the gig economy and provide insurance for freelance workers.

The Rise Of The Gig Working Economy

With the dramatic growth of the gig economy, the working landscape has most certainly changed. With many individuals now turning towards freelance and on-demand based roles, they are providing a whole new level of flexibility to the modern workforce. It is estimated that by the year 2019, at least 50% of the labour force will a “gig worker”. This is especially due to the attractive “remote-work” nature that it offers to the younger generations. A working economy like this helps to provide gig workers or people who have a side job in addition to their full-time job, such as dog walkers with not only more flexibility but also more control over their career development. While it is clear that this new generation of workers has caused a significant shift, what isn’t clear is how insurers are going to survive it.

Why Insurers Are Battling To Catch Up With Freelance Workers

Freelance workers have fled traditional employment making the traditional terms of insurance no longer relevant. These individuals do not have the same opportunities as their full-employment counterparts in terms of company benefits, nor do they need annual policies. Therefore, without the necessary adaptions from insurance providers, they are on the verge of quickly becoming one of the most underinsured generations to date.

Gig workers and freelancers such as photographers or music instructors enjoy the independence and freedom that the gig economy offers them. These individuals are not tied down to just one role but rather work many different ‘gigs’ for a plethora of different businesses or individuals at the same time.  And for this reason, the boundaries of the gig economy are constantly changing presenting new needs and risks on a month-by-month basis.

With the needs of freelancers is constantly in a state of shift, so too will be the protection that they need. This can make the traditional annual insurance contracts we are all used to seem too rigid and impractical for their needs. However, many insurance providers and companies have been unwilling in the past to drastically change the way that they offer insurance products. Therefore, causing a battle for insurers to catch up with freelance workers.

Surviving The Shift: Innovations For Insurers To Keep In Mind

In order to survive the shift that the gig economy has created, insurers must be willing to adapt and innovate their product offerings to appeal to the needs of freelancers and on-demand gig workers. With technology now a vital part of our daily lives, it is important that the insurance industry follows suit to adapt to a more on-demand and user-accessible consumer behaviour.

As we have previously mentioned before, insurers need to change how they are reaching out to and beginning conversations with the millennial generation. Yet, not only that, the insurance products that they offer must match this conversational change. Below, we mention the top insurance product innovations that insurers should keep in mind when surviving the shift. Doing so will help them not only catch up with freelancers and gig workers but also win them over.  

The Automated Process

Gig workers and freelancers are tech savvy and self-directed consumers who don’t necessarily want to speak to an insurance broker or agent. These individuals conduct all of their daily work and life processes through apps or over the Internet due to the autonomy that it provides. So, for this reason, buying an insurance product must as easy as it is for them to book another gig or order an Uber.

Without an automated process, the insurance industry will find it very difficult to sell insurance policies to the gig working economy. Freelancers and gig workers step away from a buying process that is too time-consuming and troublesome in favour of an option that provides them with an instant product or solution gratification. By adapting the process in which insurance policies are sold online or via mobile,  making it more automated and user-friendly, insurers and insurance brokers could see a huge shift in the number of gig workers protecting themselves.

On-Demand Coverage

We are currently in an era where the consumer industry expects instant buyer gratification and the same applies to the insurance industry. An on-demand workforce requires on-demand insurance coverage. Be it a commercial general liability insurance policy or travel coverage, gig workers are turned off by offers of annual policies and prefer more flexible policies, especially in terms of time constraints.

With the gig economy being unpredictable in nature, most freelancers and gig workers prefer to choose insurance products that allow them to protect themselves for shorter durations, such as day-to-day, month-to-month, or gig-to-gig. In some cases, they purely search for coverage for just a matter of hours like when they are travelling. Therefore, allowing users to have more flexibility in the way in which they access and use insurance products could hugely impact how this generation views the benefits of insurance policies.

Product Flexibility: Not All Gig Workers Are Alike

It is important to remember that not all gig workers are the same. They all come from different walks of life and perform different styles of work such as designing a website, walking dogs or even being a videographer for a wedding venue. As the risks and needs of these gig workers vary greatly and change constantly, it is important for insurance coverage to reflect this.

Offering custom insurance packages that are specific to the individual could greatly help in keeping this section of the workforce insured. It is important for insurance providers to listen to the individual needs of gig workers and discuss the best way to keep them insured especially when the nature of their workforce changes so often.

Challenging Disintermediation: The Gig Economy Requires Proactivity

In order for the insurance industry to survive the shift that the gig economy has caused, it needs to stay proactive and relevant. The rising concern that disintermediation presents means that insurers need to be developing innovative solutions and speaking with customers in a conversational manner to keep the younger generations engaged. With platforms such as Airbnb already offering users “host guarantee” policies without the need of a specialist insurance firm, there is nothing stopping similar platforms providing for the insurance needs of gig workers. So, in order to prevent this from happening, insurers need to be challenging disintermediation and adapt with the gig economy.  

JAUNTIN’: Rising To The Gig Economy Challenge

JAUNTIN’ understands the need for the insurance industry to adapt to the shifting nature of the gig economy in order to offer innovative solutions and products that would help to insure those individuals in freelance and on-demand based roles. We partner with insurance providers to help them bridge the gap and offer products such as liability coverage and travel insurance on a platform that is accessible, easy-to-use and on-demand. Our aim is to help insurers rise against the challenges that the gig economy provides and help them survive the shift.