The world of employment is always changing, however today there is an acceleration towards people looking after their own hours and becoming more flexible. The sharing and gig economy is here and we are providing sharing economy insurance around these new businesses.
Two large surveys have been undertaken in the UK and USA about the Freelance or GIG economy, apparently it’s preferred now to call it the Freelance Economy, both surveys released earlier this year, 2017.
- Freelancing in America Survey by the Freelancers Union and the giant freelance platform Upwork.
- Good GiGs Survey By The RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce).
The surveys show that freelancing continues and stunningly suggests that by 2027 a majority of U.S. workers will be freelancing. UK freelancing is to growing apace with many peer to peer platforms driving this change and access. This is a great opportunity for development of new services such as insurance.
The current mix of work being undertaken by the freelancers is:
- Professional, creative or administrative services 59% of workers
- Skilled manual or personal services 33% of workers
- Driving and delivery services 16% of workers
The growth in technology platforms has made it easier to find work and to present yourself or your business as a freelancer. Platforms such as Upwork, People Per Hour, AirBnB, Uber easily come to mind but these are just a few of the many new platforms available.
While freelancing is a part-time or side gig for many respondents, a growing number are making a living freelancing. In the US, 29% of freelance respondents said their businesses are their sole source of income. That percentage rose by from 17% in 2014. The main drivers for full-time freelancers, the survey found, are freedom and flexibility. The demand for this type of work has accelerated over the last few years and shows little sign of slowing down. The UK survey found that young people (aged 16-30) are particularly attracted to the idea of freelance work – one in four said they would consider some form of it in future. Given this enormous potential for growth its time now to think of how platforms can become a catalyst for fair, fulfilling work in the modern labour market. There are challenges as to how to respond to the impact of freelance work.
There are views camps forming; One view is that government and business should be actively encouraging innovation and supporting platforms to scale. These people are the champions of platforms as progressive and liberating, highlighting workers newfound freedom and flexibility; The other view is that companies and government must keep standards, and thus be active when it comes to the practices and processes of platforms using self-employed workers, the fear is a race to the bottom in terms of pay and conditions.
Another view is that there is a middle ground, again lead by markets and companies that want to protect and manage their risk. The companies will lobby for change in employment and standards. These changes will again lead to updates in how local authorities and governments act. The platforms need to keep both the customer and the professional (the freelancer) happy, they need BOTH parties to be there. The freelancer has as much choice as the customer. It puts the difficulties of regulation into perspective; since there is no universal experience within the gig economy, government must carefully weigh many trade-offs for workers in deciding whether to intervene and, if so, in what way.
Insurance is the traditional way to protect against employment and business issues and over the many years the industry has developed products to protect both employees and businesses alike. The industry is intertwined with employment and commercial regulation and law and their products are distributed and bound in the old and outdated practices of the insurance industry.
Today the focus of the industry is still on the annual policy, renewal books, bundled policies and manual claims processes. Technology is not a strong suit of the industry. The industry is changing on the fringes and there are start-ups and partnerships forming to improve its technology and financial performance and to face up to the revolution that is taking place in the platform businesses.