Tag Archives: collaborative consumption

How to Embrace Workforce Flexibility

Because of the economic crash in 2007, many people were left scrambling for work, any work.

Those who were determined, but still came up short, looked inward to their skill sets and assets to find relief.

The answer quickly became obvious; what is now referred to as the flexible workforce or sharing economy, is made up entirely of freelancers and independent contractors.

This new group of freelance workers now makes up more than 35% of U.S. workers and earned more than $1 trillion last year.

This information is found in a recent survey, “Freelancing in America: 2016,” which was published by Upwork, one of America’s largest freelance workplace platforms.

The Gig Economy: A Brief Introduction

The gig economy is a term that describes a portion of the U.S. economy that is made up of freelancers. It is often used, interchangeably, with “sharing economy,” “collaborative consumption” or “access economy.”

This growing army of gig workers has become an integral part of the workforce, available on an on-demand basis.

This has allowed innovative businesses to pivot and remain nimble. Indeed, in an era where consumers are increasingly more interested in access over ownership, flexible workforces have become powerful tools for businesses.

Although many believe this segment of the workforce may be a fad that will soon to be diminished when unemployment numbers eventually plummet, a closer look at available data indicates otherwise.

Reportedly, the gig economy has grown every year over the past five, and there are solid indications that this trend will continue.

See also: 9 Impressive Facts on Sharing Economy  

What the Feds Report

Well, they haven’t quite caught up yet – although they’re getting there.

The labor experts in D.C. minimize the gig economy by referring to gig workers as “contingent workers” (any position not expected to last longer than one year).

The feds report that that this segment makes up about 4% of the total workforce.

Looking more closely, however, one can easily determine that the most recent survey numbers used by the Bureau of Labor Statistics refers to data accumulated more than 10 years ago.

I don’t feel like we need to delve into why that’s an issue, correct?

How the Gig Economy Is Growing

The gig economy continues to increase as traditional companies look for solutions to workforce issues.

Although “outsource” is a term that consumers and traditional employees detest, no one has a problem with a temp in the workplace.

But when you use the word “outsource” (which is what a temp employee is), many Americans think of good American jobs being sent overseas where workers will work for pennies on the dollar.

The gig economy is growing because entrepreneurial gig workers now have the means to share with others how they can become freelancers and realize their dreams of being self-employed.

Platforms such as Upwork, Airbnb, Uber, TaskRabbit, WeGoLook and many others seamlessly connect this new freelancer class with those who have paid work available.

This entire process is all facilitated by innovative mobile technology and apps.

What’s not to love about that?

It’s certainly not for everyone, but for those who even feel a mild burn of the entrepreneurial spirit, they can use their skills or assets to become part of the gig economy.

Why The Gig Economy Is Growing

The gig economy (flexible workforce) continues to grow because America needs it to grow.

Companies can access skilled on-demand workers for one-off or continuing tasks.

Thanks to on-demand worker platform, businesses can now access expert freelancers to perform critical functions that are temporarily needed.

According to Jobshop, nearly one-third of B2B companies plan to hire gig workers over the next five years.

Further, a report by Fieldglass indicates that 95% of B2B companies not only understand, but recognize, the need to incorporate the gig economy into their business models.

The American workers are changing. Many regard employment as a job totally unrelated to what their life goals may be.

Goals that were formed in their minds at a young age and continue to burn deep in their hearts.

Even highly skilled workers earning terrific incomes imagine what it would be like to do what they love to do rather than what they have to do.

Although born out of necessity, gig work has become a compromise for millions of hard-working Americans.

Freelancing allows them to choose to do what they love and what they are best at. It provides the flexibility to work the hours of their choice, spend more time with family and become highly skilled experts in a field they love.

Embracing the Flexible Workforce

The insurance industry can embrace this growing flexible workforce made up of skilled freelancers in a number of ways.

For starters, insurance carriers can use skilled gig workers to create efficiencies across many channels in their organization.

Although major insurers have embraced technology, they continue to fumble the ball streamlining their processes and supply chain.

Similar to the federal government, large insurers have many layers of bureaucracy that at times put the breaks on workflow, innovation and even communication.

The result typically frustrates the consumers they have committed to serve.

In the digital age where consumers crave access, convenience and timely services, cumbersome policies and bureaucracies will fade. Quickly!

Areas that need rethinking and refocus are those where consumer interaction is critical.


There are many critical areas of communication that need not be assigned to full-time workers.

These tasks are generally performed on-demand and for specific reasons and following certain events.

Using a skilled freelancer who can be available on an as-needed basis for a short period makes more sense than using a highly paid (when you consider compensation plus benefits) full-time employee.

See also: Benefits: One Size No Longer Fits All  


Streamlining the claims process is a priority for every insurer because it’s not only a profit-earning department, it has many functions considered menial to an experienced licensed adjuster.

Tasks such as consumer visits, picture taking, damage verification and more could easily be assigned to a local gig worker.

Why maintain a network of thousands of field employees nationwide when you can access hundreds of thousands of on-the-ground gig workers when you need them?

Although claims activity can be forecast to a certain degree, many insurers are caught off guard with the arrival of events such as a natural disaster.

This often leaves carriers scrambling to recruit independent contractors, who sometimes are unwilling to perform many of the tasks that a freelancer can provide.


Because marketing is about communicating with various market segments, it makes sense to contract with gig workers who specialize in that particular demographic.

For example, millennials communicate differently than Generation Xers, who talk differently than Baby Boomers.

Although each category can have similar insurance product needs, they prefer to learn about it, and make the purchase, in different manners.

Whether you are an agency or an insurer, outsourcing your marketing needs to a gig workers can make more sense than loading your payroll with different personality types so that you can accommodate the preferences of the various market segments.

Or, many companies are electing to leverage gig workers to augment their current full-time staff. Gig work isn’t a full-time or part-time discussion – they can be complimentary.

Whether you designate this growing on-demand labor force as the flexible workforce, gig economy, freelancers or outsourcing, there is no doubt that this workforce can provide skilled on-demand workers to the insurance industry.

These are workers who are doing what they know best and are passionate about.

Principals in the insurance industry should look to this flexible workforce to streamline processes that affect consumer satisfaction and save payroll dollars in the process.

As the gig economy continues to grow as a viable employment alternative for many, traditional insurers can get ahead of the curve by leveraging them and embracing flexibility.

What Gig Economy Means for Insurers

I consider myself extremely lucky. I have a front row seat to a monumental shift in consumer behavior, which translates into important opportunities, and risks, for traditional insurance providers.

I don’t plan on sitting back and watching the show from a distance, I’m getting involved. Although for the record, I am not a good actor. Maybe I’ll take a gig with the stage crew.

The shift I am referring to is the so-called gig economy. Some use synonyms like the sharing economy, access economy or collaborative consumption. The list goes on. All of these terms boil down to one important reality: the ability to turn otherwise unproductive assets into income-producing ones through micro jobs, or “gigs.”

These assets include cars, homes, consumer items, hobbies and spare time.

As a vote of confidence to this new trend, Merriam-Webster added the term “sharing economy”: Sharing Economy (Noun): economic activity that involves individuals buying or selling usually temporary access to goods or services, especially as arranged through an online company or organization. 

According to PricewaterhouseCoopers (PWC), the estimated value of the sharing economy sector by 2025 will be $335 billion. For 2013, that same number was $15 billion. In just more than 10 years, then, PWC predicts that the value of the sharing economy will skyrocket by more than $300 billion.

See also: How to Insure the Sharing Economy

recent TIME Magazine study reports that 45 million American adults participate in the sharing economy. This is 1 in 5 American adults! Let that number sink in for a moment.

You good? Okay, let’s continue.

The explosive growth in the sharing economy is occurring amid a backdrop of larger social, economic and demographic trends. These include:

  • Increasing urbanization (people have less space)
  • Aging demographics (older people have less money and need more services)
  • A shift in consumer behavior from ownership to access

In an excellent 2015 Insurance Thought Leadership article, Neil Howe concluded that, “although some dismiss the gig economy as a fad, a hard look at the numbers shows it’s both large and growing, with profound implications.”

So, business is booming, consumers are participating and socio-demographic trends support the growing sharing economy sector. What does this mean for the insurance industry as a whole? A lot.

Let me explain.

Today, I want to plant a seed. Well, as a matter of fact the seed has already been planted, a number of times by a number of entrepreneurs. What we are doing today is watering those seeds. The insurance industry is thirsty for disruption, and this is a good thing.

Insurance Industry, Meet Sharing Economy: An Introduction

In January, I wrote about my company, WeGoLook, and its applicability to traditional insurance operations. Specifically, we discussed the challenges the industry faces because its slow processing of claims can’t continue in an age where customers demand immediate access to information, as well as the opportunities that the demands create for innovators like WeGoLook. Thanks, millennials!

Today, I want to delve deeper into the disruption of this new gig economy, or sharing economy, in an effort to unpack some of the opportunities that are staring directly at us.

The insurance industry is currently at a technological and innovative crossroads. To take the correct path, strong leadership is required. Lucky for us, you don’t have to be an industry expert to be an industry leader.

The founders of Airbnb quickly began competing with (and surpassing!) large hotel chains, with zero knowledge about the accommodation industry — except being proficient at inflating air mattresses. Similarly, Uber quickly disrupted the taxi and transportation verticals with no industry experience. We live in an age where we either adapt or risk getting left behind as technology marches on. So, it’s imperative that we as industry experts fully understand how to incorporate new business models in our value chain.

See also: ‘Gig Economy’ Comes to Claim Handling

That’s what I hope to achieve in my business; to help lead us into a new era where innovation is understood, adopted and refined. I believe this is your goal, as well; after all, you are a subscriber to Insurance Thought Leadership.

So how can the new gig economy plug into traditional carrier business operations?

The Gig Economy: WeGoLook and Flexible Workers

Slowly, we are realizing that the insurance industry as a whole is one of financial arbitrage, rather than logistics. Why would a large insurance firm employ thousands of boots on the ground nationwide when gig economy companies such as mine have access to a flexible and ready workforce available at the tap of a smartphone? B2B crowdworkers can quickly gather information for underwriting and claims processing. These workers also have the ability to retrieve police reports, notarize documents, pick up salvage items, deliver documents and much more.

Remember, the sharing economy is about leveraging underutilized assets, including spare time, to fulfill both consumer and business requirements.

Crowdworkers offer four main benefits to traditional carriers:

1. Faster Flow of Information

As we all know, processing claims requires time and patience to gather relevant information, photographs and a myriad of other documentation. Getting the right information and accurate documentation can take even longer.

Yet, commercial policyholders need to know how quickly they will be receiving funds from a claim so they may, in turn, inform their customers. Similarly, individual policyholders need a claim settled without delay so they can return to normal life. This is just good business practice.

Digital and mobile platforms provide a faster flow of information. They also allow for the easier integration of crowdworkers while making sure that the right information flows into the right hands at the right time. For example, the WeGoLook mobile application directs our Lookers, those gig workers we were talking about earlier, to capture on-site data in the form of photos, video, measurements, answers to specific questions and more.

2. Ordering Efficiencies for Claim Handlers

While carriers worry about the massive rework that needs to be done to update back-end systems for the demands of today’s customers, a system like ours can be used as a front end that obviates the need for much of that work. For instance, once an order has been uploaded, WeGoLook will contact the policyholder to schedule an on-site inspection appointment, removing the task from the carrier’s workflow. The claim handler at the carrier can easily make special language or expertise requests, such as the requirement for a Looker who is also a notary, and not have to worry about logistics. WeGoLook technology allows for the claim handler to view video and photos within the report — even when the carrier’s back-end does not support video.

For good measure, because new systems are written from scratch and don’t carry all the baggage of legacy systems, users of our ordering dashboard can place an order for a Looker within an average of four minutes, compared with 12 minutes in traditional systems used to dispatch field assignment representatives.

See also: On-Demand Economy Is Just Starting

3. Customization and Security

Writing from scratch also lets new companies customize reports to the needs of clients, letting them view data however they like. Nothing changes, no matter the location of the policyholder or asset.

4. Cost Efficiencies

Finally, while I am the first to acknowledge that an on-demand workforce does not fully replace technical or specially certified field personnel, such as claims adjusters, a flexible workforce can be dispatched at the click of a button and can certainly augment, and in some cases, replace the need for full-time field staff.

Efficiencies emerge in the form of salary costs, fleet vehicle costs, travel expenses, labor costs and much more.

Yes, there will always be the need for an experienced field adjuster to be present under a number of circumstances. However, this is not the bulk of required work, and traditional carriers are wising up to this fact.

Conclusion, for Now

We believe that insurance should be smart and streamlined and adapt to customer needs. And these needs are changing rapidly within our disruptive environment. Insurers need to make their workforces more flexible by taking advantage of the gig economy.

The seed has been planted. The question now is, will the landscape become an innovation desert. Or, can we help foster and develop a fertile growing climate, reminiscent of the Oklahoma grain farms I grew up with.

I strongly believe it is the latter. I’m carrying a watering can and have my gardening gloves on.

Good luck, and don’t forget to water regularly!

A New Ride-Sharing Service Raises Even More Questions

The U.S. has seen an explosion in what is often referred to as the emerging “sharing economy” or “collaborative consumption.” In an increasingly connected society where most people have access to mobile communication devices, peer-to-peer services are springing up, based on mobile apps that consumers can use to access transportation services that historically have either not existed or were controlled by often highly regulated business or government entities.

One might argue that this is not a new concept, given that hitchhiking has been around since not long after the wheel was invented and was quite common in the 1950s and 1960s until it fell out of vogue as its inherent dangers gained more attention from the media and increasing numbers of consumers owned or had access to automobiles or mass transit.

But what we’re witnessing today is a relatively new phenomenon. Uber, Zimride, Lyft, ZipCar, Turo, GetAround, TaskRabbit, JollyWheels, RentMyCar, Zilok, CityCarShare, bla, bla, bla, bla, bla….

Which brings us to BlaBlaCar, the latest incarnation of car sharing. Founded in France in 2006, BlaBlaCar now claims to operate in about a dozen European countries and is exploring expanding into other countries, such as India and Brazil. BlaBlaCar bills itself as a “ride sharing” mechanism, as opposed to “car sharing.” That falls somewhere between fee-based hitchhiking and a somewhat irregular share-the-expense car pooling arrangement. Details on how the system operates can be found at the company’s web site.

BlaBlaCar currently does not operate in the U.S. There is some question as to whether it can be as successful in the U.S. as it claims to be in Europe. Owning and operating a vehicle in Europe is far more costly than it is in the U.S. There is also a perception that Europeans may be more trusting of, or accustomed to, riding with strangers than Americans are. In addition, there are social issues to consider in the U.S. For example, a BlaBlaCar driver can refuse to transport particular passengers. If such a driver is white and a declined passenger applicant is black, would there be civil rights issues that could be addressed by claims or suits for discrimination?

The question addressed by this article is, if BlaBlaCar were to begin operations in the U.S., would the personal auto insurance policies of its drivers cover this type of activity? According to the terms and conditions on BlaBlaCar’s web site and media articles about their service, most auto insurance in Europe covers this exposure because there is no “profit” involved. The passenger fee is referred to as a way to share the cost of a trip. The terms and conditions include a stringent hold-harmless provision and a liability cap to protect BlaBlaCar.

However, the company’s position on how personal auto insurance responds in Europe would be immaterial if it were to commence operations in the U.S. Many, if not most, personal auto policies in the U.S. may exclude BlaBlaCar activities regardless of whether a “profit” is sought or made. The decision could depend on the facts of each situation and the exclusion wording in the policy. The first question is whether there can be assurance that a driver is not making a profit. Second, the policy language may not consider profit to be an issue. For example, these are the two most common exclusions found in U.S. personal auto policies:

  • We do not provide liability coverage for any “insured”…for that “insured’s” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This Exclusion (A.5.) does not apply to a share-the-expense car pool.
  • We do not provide liability coverage for any person…for that person’s liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee. This exclusion (A.5.) does not apply to a share-the-expense car pool.

This language is taken from two different edition dates of the “ISO-standard” personal auto policy. In the case of use as a “public or livery conveyance,” ISO’s filing memorandum stated that the intent of this exclusion is to preclude coverage for vehicles available for “hire” to the general public for the transportation of people or cargo (e.g., taxis, sightseeing vans and package delivery services). The exclusion is not contingent on the profitability of the person or enterprise holding their vehicle out to the general public for hire.

In the case of a vehicle used to “carry persons or property for a fee,” there is no mention whatsoever of whether this fee generates a profit for the owner/driver. In one case, this exclusion was held to apply to someone who used his pickup truck to transport a friend’s son’s belongings to college in exchange for gas money.

However, both exclusions admittedly exempt a “share-the-expense car pool.” So what is meant by a “car pool”? One dictionary definition describes it as: “an arrangement between people to make a regular journey in a single vehicle, typically with each person taking turns to drive the others.”

Note the reference to “regular” and alternating as drivers. On the other hand, Wikipedia’s discussion of the term “carpool” implies a potentially broader concept that could include how BlaBlaCar operates. This muddies the water to the point that no blanket statement can be made about how U.S. personal auto policies might respond to claims arising from BlaBlaCar and similar ride-sharing services. If this were to become a significant exposure, one might expect U.S. insurers to define “car pool” in a way that precludes coverage for these services.

In the past year or two, we have seen various forms of “car sharing” exclusionary endorsements introduced by ISO and individual insurers, though many of them still do not fully address the “share-the-expense car pool” situation. The only conclusion we can reach at this point is that how a vehicle is being used and how that use fits with an insurance policy’s insuring agreements and exclusions are becoming much more important and more difficult to determine.

The insurance industry is not known for its innovation nor its ability to respond quickly to emerging social changes. The usual reaction is to exclude an unanticipated exposure until the industry can reasonably measure and predict the risk of loss. The growth of car- and ride-sharing (not to mention home-sharing) is something that will need to be closely monitored by the industry.