I am so excited to participate in the InsureTech Connect 2016 Conference taking place in Las Vegas this week. If you haven’t picked up your tickets yet, do so. It’s going to be a blast!
I am also honored to be speaking at the conference, alongside amazing entrepreneurs like Jacob Brody of Helpful Networks, Isaac Oates Founder of Justworks and Jeff Oberstein, chief customer officer and head of science, Global Consumer Insurance at AIG. I’m actually a little nervous.
Our discussion on Wednesday, Oct. 5, is titled “Sharing Economy’s Impact on the Insurance Ecosystem.” We will attempt to unpack the implications of the rise of the sharing economy for the insurance industry, and how it’s changing the nature of work, and workers.
In this vein, I want to pave the road slightly with a few key insights that will help frame our discussion.
The sharing economy has been termed many things over the years: gig economy, freelance economy, circular economy, collaborative consumption, and most recently “digital matching firms” by the federal government.
No matter what you term it, this new industry has changed how we consume, much like insurtech has disrupted the traditional insurance industry. How products and services are delivered is changing before our eyes. And this is a good thing.
See also: 8 Exemplars of Insurtech Innovation
To better situate our thinking for InsureTech Connect 2016, here are nine impressive facts about the rise of online marketplaces, something we now term the sharing economy.
1. PricewaterhouseCoopers predicts that the sharing economy will grow to a $335 billion industry by 2025. In 2013, this industry was valued at $15 billion.
Why it matters: We are in the midst of a transformation.
2. In 2013 alone, it was estimated that revenue passing through the sharing economy into people’s wallets was more than $3.5 billion.
Why it matters: Can you imagine what that number is now? The sharing economy is becoming a new employment marketplace faster than we may think.
3. Airbnb has hosted 60 million guests since its founding and now has two million properties listed. This is almost double the hotel rooms currently owned by the largest hotel chain, Starwood-Marriott, which has 1.1 million rooms.
Why it matters: Airbnb was founded in 2008. So, in eight years, Airbnb has more than overtaken the largest hotel chain in the amount of rooms available. This is disruption 2.0.
4. Sharing economy work is overwhelmingly part-time. Consider that the vast majority of Uber drivers work less than 30 hours a week, with 66% saying they have no set hours. Further, the average Airbnb host rents out her property for 33 nights a year.
Why it matters: This is hardly full-time employment. It’s exactly what we see at WeGoLook; people are leveraging our platform to supplement income through flexible part-time work. It’s patchwork employment, and this is good because it gives people options and employment flexibility.
5. According to Time, 44% of U.S. adults have participated in the sharing economy in some fashion. The same study found that 22% of Americans have sold services in the sharing economy. And, the vast majority of those who offered services in the sharing economy described their experience as a positive one.
Why it matters: Americans are using and selling in the sharing economy. Simple as that.
6. According to JP Morgan, working in the sharing economy boosts incomes by 15%. For Airbnb hosts, on average, JP Morgan found that sellers earn an extra $314 a month, or $533 for Uber and TaskRabbit.
Why it matters: People are actually earning decent supplemental income, and they love it.
7. Although millennials use the sharing economy more than other demographics, we cannot forget about the Baby Boomers. According to research by Emergent, 18% of workers in the sharing economy are 55+. This study concludes that “the number of older Americans seeking this type of work will likely continue to grow.”
Why it matters: We all think of innovative technology and equate it with millennials, but Baby Boomers are right in there as well and will require new tools as they retire and age.
Why it matters: We are moving to a freelancer workforce. People are craving flexibility and are willing to trade the certainty of a 9-to-5 job with benefits and pension, for the freedom of freelance and gig work. At WeGoLook alone, we’ve seen our gig workforce grow from zero to now more than 27,000 in just seven years.
See also: How to Insure the Sharing Economy
9. The sharing economy makes people happy by making their lives affordable. For instance, 86% of respondents from a recent PwC survey agree that the sharing economy makes their lives more affordable.
Why it matters: There’s a reason people are gravitating toward access over ownership. It makes their lives easier, more affordable, and offers them income generation opportunities with almost zero startup costs.
So, how will the insurance industry adapt to the sharing economy and growing disruption of the insurtech revolution? You’ll have to meet me in Vegas to find out.