Chubb partnered up with gig economy start-up Bunker in March 2018, confirming that strategies for insuring the gig economy will be shaped by start-ups, not incumbents, according to GlobalData Financial Services.
Bunker is a usage-based insurer for independent contractors. It has already enjoyed significant success, attracting over $8m and operating in 43 states across the US.
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Chubb’s investment is the latest example of a multi-national insurer enlisting the help of a start-up to enter the gig economy.
It is certainly an area with huge potential, with the UK Department for Business, Energy, and Industrial Strategy estimating that over 50 million people already work in it.
Bunker has stated in a press release, with research from MBO Partners, that 58% of the US population will work, or will have previously worked, in the gig economy by 2020. Previously, global insurer Hiscox invested in Bunker as part of a $2m seed funding round in 2016.
Other examples include Aviva investing in Zego, a digital pay-as-you-go insurer for delivery drivers, in 2017. Likewise, Dinghy, which provides flexible insurance for professionals through an app, received funding from insurance investor ReSolution at the start of 2018.
The key for insurers is that policies are digital and flexible.
Offering services by the hour that customers can switch on and off via an app will be essential in appealing to employees of digital companies, such as Deliveroo and Uber.
Therefore start-ups, with no existing protocols and legacy systems, will be best-placed to offer a fresh approach. It appears as though large insurers have recognized this – and the potential size of the market – and are looking for viable partners to avoid missing out.
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