India ranks among one of the youngest countries globally, with an average age of 28.4. The unique demographic advantage, along with the work culture shift brought by the pandemic, has put forth the nation on a roadmap of swifter economic growth by giving genesis to a whole new era of career prospects. This includes employment opportunities distinct from the traditional, permanent long-term tenures to short-term agreements or freelance work, thereby forming the gig economy.
The seismic shift of the millennials who prefer work-life balance over long work hours is quite evident, especially post COVID-19. Thus, organizations requiring such employees are now modifying their approach to retaining talent. Moreover, they are taking positive steps towards providing incentives beyond the pay for their services. One of the steps taken in this direction is providing insurance coverage, not in the conventional format, but by teaming tech and data to create a niche offering.
In a country like India, the percentage of employees relying on employer’s insurance is huge, thereby making it an important part of the compensation. Now that the working model is changing, so is the compensation model. Also, these products are tweaked to incorporate features that take into account their short stint but still be motivating enough for them to instil a sense of belongingness.
Going by the stats, India’s gig sector, which includes on-demand speciality contract workers, food deliveries and warehouse employees, remote working, etc., is predicted to grow to US$ 455 billion at a CAGR of 17% by 2024. It also has the potential to expand at least 2x the pre-pandemic estimates as per a report by ASSOCHAM.
Not only this, another recent report by India Brand Equity Foundation states that the country will presumably have 350 million gig assignments by 2025. To cater to this rapidly expanding new-age workforce, firms are working with insurance companies to include specialized and personalised offerings. The focus goes beyond the customary health insurance coverage and stretches to cover mental health and overall wellness as well.
Likewise, some may offer extended insurance for families and partners at an affordable price. However, all this is given with a spin by tactfully linking the present-day policies to productivity and basing them on daily, weekly or even hourly targets. Furthermore, they also introduce guidelines that include daily to weekly insurance coverage, keeping in view the project timeline.
To accomplish this, the organizations rely upon analytics to calculate the risk and use insurance as a stimulus to propel better performance. But for the AI-powered InsurTech partners, this isn't a straightforward formula as the gig employees often have different agreements and can switch companies within the same day and without any notice.
Thus, the platform created for such needs has to work on a real-time basis to keep a check on any existing and even joining firm. They also have to ensure that issuing an insurance policy and its claim is swift and easy. As the industry is all prepared and increasingly veering online to become mobile-first, providing ChatBot and WhatsApp bots services that will overcome language and the technological barrier is becoming equally paramount.
To conclude, with the current cutting-edge digital online platforms and proliferation of mobile applications, geographies are no longer a constraint to higher talent. Therefore, insurance for the gig economy, which is an instant match of demand to supply, is here to stay and grow.
Moreover, though yet to be implemented in India, in 2020, the Code on Social Security extended social protection to the employees in the disorganised sector by providing them with income benefits in the case of maternity leave, disability insurance, work injury, health insurance, old-age unemployment protection to the workers in this space under the Employee State Insurance Scheme. As a result, providing the gig people with insurance to secure their health and wellness is considered the right step. So, invest in the people by offering insurance shields to them.
Raghuveer Malik is the Business Head for Corporate Insurance at Policybazaar