Incumbent insurers and brokers need to develop products to cater for the growing gig economy before it becomes a stronghold for insurtechs. The latest partnership between Uber and INSHUR highlights this more than ever.
The UK gig economy is currently served by a number of insurtechs, with large, composite insurers being absent on the whole. The market holds great potential due to the cultural shift towards increased flexibility when working (which is the focus of the gig economy) combined with a low number of players operating in the space. GlobalData estimated the market to be worth a potential £716m in GWP, but incumbents still appear to lack appetite – leaving the door open for insurtechs to reap the benefits.
Uber recently announced a partnership with INSHUR, an insurtech that uses information about trips, location, and driver ratings to calculate risk level and provide more tailored premiums. INSHUR is one of only a handful of completely mobile private hire vehicle insurers currently operating in the UK. Its approach to calculating premiums combined with its mobile platform were no doubt core to securing the Uber partnership, as the traditional process is far more laborious and time consuming.
Incumbents need to respond quickly by ensuring policies can be delivered through mobile channels and are flexible enough to cater for gig economy workers. Failure to do this will only open the door wider for insurtechs to establish themselves as the main players. The INSHUR-Uber tie-up is just the latest example of this; other insurtechs have already formed partnerships with some of the most recognizable gig platforms, including Uber and Deliveroo.
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