Page 22 - Turkinsurance Digital Magazine

20 at a glance

Insurance is tested yet again with gig economy

Defining the working method of Y-generation with their life- In time, those platforms
styles and consumption habits, ‘gig economy’ is also shaking have begun to transform
the foundations of traditional insurance. Kerem Vardar from from customer to customer
KPMG Turkey states that Y-generation offers a huge opportu- (C2C) markets into Busi-
nity for the insurance market as they prefer to work part time ness to Customer (B2C)
or free time. and business to business
(B2B) markets.
‘Gig economy’ concept which is regarded as a byproduct of the
era of digital destruction is one of the biggest trends affecting No security
the existing labor force in the last 10 years.
Since it is based on tem-
The concept of gig economy defines those who work part time or porary jobs, gig economy
free time for temporary jobs, and is transforming the traditional does not provide employees
economy and changes the way how companies they hire them with fringe benefits such as
do business. According to researches done in USA, more than health/life insurance, un-
35 percent of the labor force are workers of the gig economy. employment insurance, or
This rate is estimated to reach 43 percent in 2020. Size of gig paid leave. That’s why, it
economy in Europe is growing day by day as a secondary source provides a huge opportuni-
of income, particularly in Austria and Italy. In countries such as ty for the insurance market.
China, India, Indonesia and Brazil, gig economy is estimated to
take over the position of traditional working method as the pri- Swift adaptation and cooperation
mary source of income. Four main reasons why gig economy is
increasingly gaining popularity especially among Y-generation Kerem Vardar, KPMG Turkey Market Leader of Financial Ser-
are listed as below: vices, states that the first expectation of gig economy employ-
ees from insurance business to provide swift solutions, as in all
• Search for flexible alternative jobs rather than the traditional other services. “New generation employees expect flexible and
method of working from ‘9 to 5.’ short-term insurance packages from the market. In addition,
• Supporting the source of primary income they do not wish to pay insurance premiums for periods when
• Focusing on fields of interest they are unemployed.”
• Transition to retirement
Kerem Vardar underlined that insurtech startups can respond to
Technology effect the demands of gig economy employees more rapidly. “Howev-
er, big insurance companies can also adapt to new expectations
Developing technology is the driving force behind the rapidly swiftly. Cooperating with new-generation startups is a swift way
growing gig economy. There are two main digital platforms of offering those solutions,” he said.
supporting gig economy:
• Platforms based on labor force: Driving cars (Uber), deliv- Vardar highlighted that the next step for insurance would be to
ering food or products (Deliveroo), building furniture, cleaning reshape health insurance and pension plans according to the gig
(TaskRabbit) economy. “Together with big players such as Airbnb and Uber,
• Platforms based on assets: Websites where people rent or sell insurance companies have already started to reach out to em-
products and/or services (Airbnb, eBay etc.) ployees with simpler and flexible insurance plans that are based
on monthly premium payments,” he added.