The number of gig workers has risen exponentially in recent years, but insurance and marketing to cover this type of worker remains limited. Insurtech Dinghy is renowned in this space and is set to make the customer journey even more convenient, with freelancers now able to purchase policies through digital-only Starling Bank. Partnerships of this type could become more common as COVID-19 offers new growth opportunities.
The partnership will enable Dinghy to market its products to a larger customer base, as it is relatively common for small businesses to purchase commercial insurance through a bank. As GlobalData’s 2020 UK SME Insurance Survey indicates, 21.7% of SMEs (including sole traders) bought commercial insurance through a bank, making it the largest channel after brokers. Businesses are drawn to purchasing insurance through the banking channel because of convenience, while many others are attracted to the quick process they offer.
A strong digital customer experience is particularly well suited to the freelance and contractor market. The nature of their services means that they are often contracted at short notice and susceptible to last-minute changes to their work arrangements at the request of employers. But if they can obtain cover online from the bank they already use, then that is another bonus – a simplified step. Plus, digital on-demand insurance that can be turned on and off from an app to match a freelancer’s work schedule is a far more viable option than longer-term policies typically offered by incumbent insurers.
Yet COVID-19 is changing the paradigm. Working in the gig economy was often by choice, with individuals attracted to a better work-life balance, more flexible hours, and arranging work for times that suited them. However, the COVID-19 recession has pushed many into unemployment, and those that do not find other jobs could enter the gig economy. Companies, too, might become more interested in gig workers in a bid to cut costs in this uncertain economy. Thus, it is likely that new freelancers and contractors will join the gig economy, and marketing insurance that is relevant to them will help improve sales.
As the gig economy grows, it is possible that partnerships of this type will become more common. They provide an ideal way to reach out to customers and market products, as well as allowing customers to purchase insurance through their preferred channel.