WhiteSight

2023 Roundup: Embedded Insurance as the Gig Economy’s Safety Harness

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Insurtechs: The New Guardians of the Gigaxy?

Life in the gig lane is a rollercoaster, isn’t it? You’ve got the freedom to choose your gigs, working in your PJs from the comfy corners of your home, car, or bike, and being the boss of your own destiny. But let’s be real, it’s not all high-fives and victory dances. Without the safety net of sick days, health benefits, or the cosy cushion of job security, it’s like walking a tightrope without a net. And with gig workers making up ~12% of workers worldwide, that’s a lot of folks walking that line, especially women and the younger crowd.

Most gig workers wouldn’t trade this freedom for a desk job, not even for a fatter paycheck. But, as they say, with great freedom comes great… risk. So, how are fintechs and insurtechs looking out for these maverick earners? 

For gig workers, the traditional insurance menu won’t cut it; they need a whole new recipe. Insurance needs to be tailor-made to fit the unpredictable nature of gig work and served up exactly when and where these hustlers clock in. Enter Embedded Insurance, swooping in to mix a dash of security into the gig economy cocktail.

In order to appeal to these self-driven consumers, insurers today are evolving in tandem with the gig economy, with automated processes, on-demand coverage, and product flexibility fast becoming the name of the game. By bundling products together and crafting coverage that’s not just relevant but also affordable and flexible, embedded insurance is filling a void that has long plagued this underserved market.

Insurers have begun to recognize the tech-savvy, go-getter essence of gig workers, tailoring policies to their diverse profiles. As a result, collaborations flourished: 

    • Uber safeguarded Brazilian drivers’ income through a partnership with Cover Genius,
    • Foodpanda Logistics ensured accident and health insurance for its logistics delivery partners by teaming up with Chubb, and 
    • Swiggy offered tailored health coverage for its delivery partners via collaboration with Reliance General Insurance.

Notably, the majority of embedded insurance partnerships have been driven by the ride-hailing, logistics, and food delivery sectors in 2023 – thanks to the proliferation of digital platforms enabling more remote and independent work that is spurred by rapid urbanization creating an insatiable demand for gig workers. Second, Asia was the geographical hotspot housing a myriad of embedded insurance partnerships, pertaining to the rapid rise of tech and digital adoption in the region, leading to more jobs, such as ride-hailing and food delivery, being redesigned and transformed into gig work.

Crucially, insurers partnering with online markets and task-based platforms gain a strategic edge through:

    • Scale and Accessibility: Insurers can tap into vast pools of freelance users at scale, enabling them to capture new markets and cut through the clutter.
    • Agile Product Launch: Embedded insurance enables insurers to launch new and differentiated products in a cost-effective and swift manner, allowing them to test the waters sooner in the market cycle and gain early market insights.
    • Building Trust and Loyalty: By providing benefits that resonate with their dynamic lifestyles, embedded insurance makes sure it’s not just about coverage; it’s about trust and loyalty. Embedded insurance products, seamlessly integrated into platforms, offer users more than just protection—they offer peace of mind.

Moreover, as global pressure mounts to regulate the gig economy, embedded insurance propositions have a unique chance to address the needs of both workers and the platform businesses that employ them. Britain’s Supreme Court decision in 2021 gave drivers the same rights as regular workers. In 2022, Brazil also enacted a law requiring app companies to provide insurance to protect their couriers in case of accidents. Then there’s Singapore – where an advisory committee’s recommendations have been shaking things up since December 2022. They’re pushing for ride-hailing and food delivery companies to chip in on social security savings and provide cover for their workers for any workplace injuries. All this highlights just how crucial it is to protect those in the gig economy.

Heading into 2024, we’re seeing embedded insurance get a glow-up, gearing up for a world where gig workers can chase their dreams without sweating the scary stuff. So, keep your eyes peeled—this ride into the future of work is getting juiced up with some serious embedded insurance magic, gig by gig.

Authors

Senior Branding Associate

Kshitija is a senior branding associate at WhiteSight, crafting branding strategies and fintech content. When she's not conjuring up new ideas for the company, you can find her dabbling in new hobbies and documenting her experiences through writing and short films.

Senior Research Associate

Risav is a senior research associate at WhiteSight, where he spends his days navigating the complex fintech landscape and poring over market trends. When he's not decoding the world of fintech, you'll find this sports fanatic decoding the perfect curveball on the football field.

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