The gig economy industry is growing, and insurtechs have recognized that workers need insurance options tailored to their specific needs. In the past three years, the number of gig economy workers in the UK has doubled to around 4.7 million. This demographic's work is different from those in normal employment, as they don't enjoy the benefits, including business insurance, provided by their employer.
Additionally, they don't work typical hours and can go days or weeks without needing workers' insurance. Further, 40% of UK workers have a side hustle, for which they don't need full-time insurance coverage. Insurtechs like Dinghy have taken notice of these unique needs: For example, Dinghy offers insurance coverage for professional indemnity, public liability, and business equipment, and has a service, dubbed Freelancer Assist, that helps users chase unpaid invoices and provides them with expert tax assistance, among other things.
It also has an activity status feature that allows users to switch their coverage to lite mode when they're not working, ensuring that work done in the past is fully insured while saving users money.
Incumbent insurers, meanwhile, are behind in digital transformation and have been slower to roll out new insurance coverage for gig economy workers — but partnerships can help them reach this audience and tap a new revenue stream.
Insurance firms are being outpaced by banks in digital transformation, while insurtechs are threatening their business. Thirty-eight percent of banks have the necessary digital and leadership capabilities to undertake a transformation compared with 30% of insurance firms. And while insurers are lagging behind in terms of innovation, the insurtech industry continues to boom. This increases the threat these young companies are posing to legacy players, and pushes incumbents to seek out new options to revamp their businesses, including partnerships.
Allianz has been betting on partnerships for a while now, which will help it stay ahead of new trends across industries, including the gig economy. In February, Allianz injected additional funds into Allianz X, its digital investment arm, to make strategic investments with relevance for the insurer. It also partnered with insurtech Wrisk in July to digitize the products for its car manufacturer business, and teamed up with Microsoft to develop new Insurance-as-a-Service (IaaS) offerings. And with this latest partnership, Allianz will likely be able to target and capitalize on the ever growing gig economy.