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Can Insurance Be Made Affordable?

PwC predicts that the sharing economy will grow from a $15 billion-a-year industry in 2014 to more than $300 billion in 2025. Now that’s growth!

Although the term “sharing economy” can be elusive, the common denominator is an on-demand workforce that leverages underused assets. That on-demand workforce is made up of freelancers, gig workers, temporary staff, moonlighters or whatever label you want to prescribe. This is leading to a world of reduced costs for both consumers and businesses.

So, can this translate into more affordable insurance products?

Let’s explore.

The Sharing Economy: A Brief Introduction

The key to the shift in consumption behavior from ownership to access (or what we’ve termed the “sharing economy”) is the use of mobile technology. Smartphones and mobile platforms have enabled major sharing platforms such as Uber, Lyft, Airbnb and WeGoLook. (Yes, we know that early agrarian communities shared everything — including labor and food. But they didn’t have smartphones!) The sharing economy also includes services — especially those that can be delivered electronically.

See also: The Sharing Economy and Accountability  

How Businesses Can Take Advantage

Individuals benefit from the sharing economy because of the ability to connect goods and services to consumers electronically or, ultimately, in person. A peer-to-peer model of consumption reduces consumer costs. Adding mobile technology facilitates the sharing and has allowed for cost savings across the board.

The sharing economy allows individuals to go into business by using the internet, a laptop, tablet or smartphone. Businesses benefit as much as individuals because they can connect, and contract, with members of the on-demand workforce for ad hoc projects or temporary services.

And businesses are noticing. According to a Jobshop survey, one-third of businesses plan to use workers from the sharing economy for their staffing needs over the next five years.

But what does that mean for insurance?

How the Sharing Economy Can Help Promote Affordable Insurance

Look at property and casualty insurance, where rates continue to increase year over year: The sharing economy can have a significant effect on payroll and service-delivery costs.

National insurance carriers have massive payrolls that drive up rates for consumers. When payroll costs are compared for W-2 employees and on-demand freelance workers, the savings is significant. When a full-time employee is hired at $20 an hour, the actual cost to the company is much more than the hourly wage because of payroll taxes, benefits, workers’ compensation premiums and unemployment insurance. Not to mention the cost of the workspace needed for each employee.

The W-2 employee who is hired at $20 an hour actually costs the employer about $25.60 an hour, so an independent contractor hired at $20 an hour reduces the cost of payroll by $5.60 an hour, or more than 20%. Contractors can also be hired as needed, so they aren’t paid full-time. Multiplying the payroll reductions by the many thousands of independent contractors working nationally, and huge savings are created that can be passed on to the consumer.

By accessing the on-demand workforce, insurance carriers can gain access to highly skilled independent contractors (many of them retirees) at minimal cost. These professionals typically work as independent contractors and offer their skills at below-market prices because they have a retirement plan.

I would know. WeGoLook employs more than 30,000 of these highly skilled on-demand workers.

Areas for Insurers to Target

Insurers seeking to reduce payroll costs can easily access various web platforms, such as WeGoLook, to search for independent contractors to satisfy their needs and save money.

These needs can include:

  • Communications: Experienced communicators can be contracted to connect with clients and agents to discuss coming programs or to conduct surveys.
  • Asset Verification: Most property and casualty insurers rely on inspections of residential and commercial properties to make certain the dwelling or building qualifies structurally for a policy. Insurers can use gig platforms to contract skilled field service agents to personally visit and photograph the property in question.
  • Claims: An insurer’s claim department relies on experienced adjusters to inspect and adjust damage to a property or vehicle. In areas with lower populations, using independent contractors makes better financial sense than hiring full-time claims adjusters.

See also: Sharing Economy: The Concept of Trust  

Make Insurance Affordable by Passing on Savings to Consumers

It’s highly likely that national insurers can reduce payroll costs and service delivery by partnering with on-demand workers in the sharing economy. Technology makes it possible for the parties to connect, discuss and contract for whatever the project might be.

The savings can be passed on to consumers, making you more competitive in a crowded market.

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.