Zego is the latest gig economy insurtech player to receive the backing of an established insurer in a partnership. This serves as further proof that the nascent gig economy insurance market has great potential.
Zego secured a deal with La Parisienne Assurances (LPA) in February 2018, which will see Zego expand its services into Europe. This follows Dinghy’s partnership with Freedom Brokers earlier in the month, and highlights that start-ups in this space are clearly impressing mainstream insurance players.
Zego offers flexible, on-demand insurance to customers with one-off jobs and variable hours. Customers can turn hourly policies on and off via Zego’s app, meaning they do not pay for any hours they do not work. It offers motor and scooter insurance to riders, public liability for professionals, and employers’ liability insurance for businesses.
Services such as Deliveroo and Uber emerging in recent years have seen this space expand at a rate that conventional insurers have not been able to keep up with. This has allowed start-ups to emerge and create a name for themselves. Zego and Dinghy are two of the leading examples, and in 2018 both received five stars – the highest possible ranking – in GlobalData’s FinTrack profiles of the companies.
Zego was only founded in 2016, which highlights how new this space is – not to mention how far it has come in three years. Initially it seemed as though these start-ups may have been a stopgap until leading insurers caught on to the potential size of the market.
However, LPA is an established French insurer, and its decision to partner with Zego suggests that gig economy start-ups will follow the same trend as other insurtech start-ups. They will not challenge the leading insurers, but there will be a series of partnerships. Incumbents are recognising the potential of the market, and instead of competing against start-ups they are choosing to harness their expertise.
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By GlobalData
