Earlier this week we had the amazing opportunity to partner with Coverager to bring together an incredible group of innovators, thinkers, and business leaders to talk the future of insurance and the gig economy at Two Sigma’s Soho offices in New York City. With over 100 professionals from a variety of industries in attendance, the meetup provided occasion for much needed dialog between insurance carriers, insurtech startups, technology innovators, and gig platforms about how they can work together across industries to address the changing needs and risks that have emerged in the new economy.

In recent months, Cake & Arrow has been thinking a lot about the gig economy and what it means for workers and for the future of insurance. Late last year we surveyed gig workers to learn more about their attitudes, mindsets, and feelings about insurance, publishing our findings in a white paper, which lead to the design of a user-validated prototype of an insurance product for gig workers. Tuesday’s event provided us a platform to share our research and findings, and to kick off a three hour conversation about what insurers and gig economy platforms can do to better address the needs and risks of gig workers.

Throughout the course of the event, we heard from a journalist, an advertiser, a panel of insurance carrier executives and a panel of gig platform founders and leaders about their perspectives on the gig economy. A few key themes emerged:

1. The worker safety net is deteriorating. Insurance can save the day.

"If insurance companies can’t bring these products to these customers, the customers will miss out on the safety net, and we’ll miss out on a great market” Darryl Siry, Chief Digital Officer

Sarah Kessler is a journalist who writes about the future of work for Quartz at Work and is the author of the forthcoming book: GIGGED: The End of the Job and the Future of Work. In a fireside chat with Christina Goldschmidt, the VP of Customer Experience & Design at Cake & Arrow, she recalled her experience reporting on the gig economy in the field. When she first began reporting on on-demand jobs back in 2008, the gig economy, and specifically platform-based work, seemed like a great thing for both workers, who had an easier time marketing and selling their services, and to businesses, who had access to a much larger labor pool. But as she began talking to gig workers and hearing their stories, and after spending a month trying to make it as a gig worker herself, she realized that while there are certainly winners in the gig economy, the reality for most is a life of precarity, with low wages, long hours, no guaranteed hours or income, and no safety net.

For branding expert Doug Cameron, who has overseen branding for both the Freelancer’s Union and Fiverr, this loss of a safety net represents an opportunity for insurers. In his talk, “Branding in the Gig Economy,” he discussed what defines an iconic brand, one of the most important things being a brand’s ability to tap into cultural tensions related to historic, societal shifts. The gig economy represents one such shift, while the loss of a safety net–the benefits and security that accompany full time work but typically not freelance or gig work–have brought about a cultural tension in need of resolution. These are the perfect conditions in which an iconic brand can emerge, and a golden opportunity for insurance to become culturally relevant, and even save the day.

Darryl Siry, the Chief Digital Officer at Prosight Specialty Insurance – which recently launched a DTC platform for DJs to buy insurance – agreed that the problems facing gig workers present an opportunity for the insurance industry. “Anything that is a new insurable interest is a very good thing for the insurance industry,” he said. And, he added, it is the responsibility of the insurance industry to reach these people, whose needs aren’t being served by the traditional insurance model.

2. In the hierarchy of gig workers’ needs, insurance is a few levels up.

"It’s like Maslow’s hierarchy of needs. If you don’t manage your tax and economic stability, you don’t get to think about insurance and benefits. We are helping freelancers take care of that bottom rung.” - Ace Callwood, CEO & Co-Founder, Painless1099

In her time spent talking to gig workers, Kessler found that for those who are able to cobble together an income from gig work, and successfully pay for their basic expenses, their next concern is making sure they have health insurance. So before they’d be up for buying other gig-specific insurance, ie. professional liability, disability etc., they’d first want to make sure they have health insurance.

This concept illustrates what Ace Callwood, CEO of Painless1099, an online platform that helps freelancers save for tax season and a panelist at the event, calls the Freelancer’s Hierarchy of needs. In this model, like in Maslow’s Hierarchy of Needs, freelancers have basic needs that need to be met before they can think about meeting higher level needs. Insurance (beyond health insurance) is a few rungs up in the hierarchy. Painless1099 is helping freelancers meet their basic needs by giving them an easy (painless) way to save enough money throughout the year to pay their income taxes. By helping freelancers do this, Painless1099 frees them up to start thinking about the next level of needs, which for many is health insurance. And if freelancers are able to take care of this need, then they’ll be ready to think about other risks they are facing as gig workers and the kind of solutions out there that can help them. This is where insurers have an opportunity to “save the day.” They just need to figure out how to position themselves, in the right place, and the right time, with the right product when freelancers are ready.

3. Collaboration–between carriers, insurtechs, and platforms–is a win-win.

“Anything that will be significant in this marketplace will start with collaboration–the question we need to answer is what is our part and what pieces of the value chain do others bring to the table?” - Jeff Rutledge, CEO, AIG Travel

As a senior executive at a legacy insurance carrier, Mick Noland.Senior VP of Product Management at MetLife P&C, understands the limitations and advantages of being a large, established carrier. As Noland understands it, carriers like MetLife are really good at a couple of things, one of them being bringing capital for protection–something the industry has perfected over the last century, and something the insurtechs and startups can’t do. This is why partnerships are key.

Jeff Rutledge, CEO of AIG Trave, who recently partnered with Expedia to offer travel insurance to customers, agrees. “You have to collaborate,” he said, “We have relationships with companies like Expedia that we are very excited about, but also with single entrepreneurs. There must be a willingness to engage in these conversations because if we don’t we’ll become completely irrelevant.”

Partnerships with platforms and insurtech startups are invaluable to carriers and to customers. Not only do startups and platforms often possess the kind of agility and speed to market lacking within most legacy carriers, but partnerships, however small, as Rutledge put it “can help us learn and understand how the risk operates,” provide ground for testing and validating products, as well as insights into what customers are looking for and need.

Customers also benefit. Rather than spending money on marketing to acquire customers, partnerships enable insurers to acquire customers less expensively, a savings which can be passed on to the customer. “If I can lower customer acquisition cost, I am more than willing to pass that back to the customer,” Noland confirmed.

And the feeling goes both ways. Insurtech startups and platforms benefit from carrier partnerships too, and are actively seeking them out in an effort to deliver more value to their customers. At the end of last month, for example, Fiverr launched Fiverr Elevate, a resource center for freelancers to help them better manage their businesses. The resource center includes classe tutorials, as well as recommended vendors for things like tax advice and health insurance. They have yet to select a commercial insurance partner to recommend on Elevate.

4. Platforms and gig workers are willing to share their data.

“Data is the most important component in how we price things.” - Matan Slagter, Head of Product Disruption, P&C AIG

Most gig and freelancer platforms are sitting on a goldmine of user data that can help insurance companies and actuaries develop and underwrite new products–and they are ready and willing to share it.

When asked by an insurer if his platform’s users would be willing to share their data with an insurance company, Josh Karam, CEO & Co-founder of Hyr, an online marketplace that connects hospitality and retail businesses with 1099 labor to fill hourly paid shifts alongside W2s, he responded without hesitation: “Yes. 100%.”

And the platforms are willing too. They just need a way to do it. “Build us an API,” said Karam.

5. Put people before products.

“Do unto others as they would do unto themselves.” - Josh Karam, CEO & Co-Founder, Hyr

From the gig workers stories and quotes highlighted by Goldschmidt and Kessler, to discussions about the freelancer’s hierarchy of needs and customer insights to be gleaned through partnerships, a need to better understand human beings––and specifically gig workers–was at the heart of every discussion that took place at this event.

And for insurance carriers, their work is cut out for them. A shift from placing people, as opposed to products, at the center of their businesses is long overdue. “Our products, for the most part are hundreds of years old,” said Noland of MetLife, “we have a lot of work to do to really re-envision the product from the customer perspective.”


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