For the 58 percent of millennials who consider themselves entrepreneurs, and hustle from gig to gig, insurance can be a barrier to launching a successful business. However, a lack of access to short-term liability insurance — with equally short settlement times — can leave gig entrepreneurs passing on projects, says Jay Bregman, CEO and co-founder of micro-insurance company Verifly. In the latest Disbursements Tracker, he discusses why insurance services must adjust to demand for instant payments.
Access to insurance is just one of the many barriers the 58 percent of millennials that view themselves as entrepreneurs have to face. Prospective entrepreneurs must endure expensive insurance policies, many of which have time-consuming, paper-based claims and payout processes. Waiting weeks for claims disbursements to settle can be particularly difficult for small business owners and gig economy workers that need flexible insurance policies.
The insurance industry is geared toward larger businesses, however. Gig economy professionals must pay for annual insurance policies they do not need — something that Jay Bregman, CEO and co-founder of the general liability insurance company Verifly, is looking to change. The company offers ad-hoc workers insurance as needed, enabling them to seek out policies that provide coverage for as little as an hour. Bregman recently told PYMNTS why gig workers’ insurance policies need to be more affordable, personalized and digital as the gig economy continues to grow.
The Art Of The Micropolicy
The gig lifestyle requires workers to switch from one job to another, and to meet the changing conditions and needs of every new client. This can leave them underserved by traditional insurance providers that do not have policies that can cover every clients’ individual risks.
“Forty percent of sole proprietors in America — over 10 million people — do not have any form of business insurance. … That’s the scale of how underserved the market is right now,” Bregman said. “[Firms] just are not set up to sell micropolicies to tiny little companies.”
Verifly launched in 2016 as an aviation insurer for drone operators, but now focuses on selling those “micropolicies to tiny little companies.” The company’s mobile app allows users pick out general policies that cover liabilities for short-term assignments to projects that can last up to a year. That means a freelance wedding photographer can cover a five-hour shoot without spending unnecessary funds on an annual policy. Workers expense the cost of the policies — which start around $10 — back to their employers once jobs are completed.
Bregman added that it was important for Verifly to be an app-based experience in a market that it rooted in paper. The firm has viewed its website as a conversion tool for its app and it continues to deliver on a mobile-first experience.
“Our customers are running their business from their phones, so they don’t want to go to a website. They want to go to an app that lets them … configure their policies automatically and show them to their clients,” Bregman said.
Users’ claims are begun via email and processed through the company’s carrier partner, Markel, but Verifly hopes it will be able to bring the claims settlement experience to mobile in the future. Bregman said the company will use advanced learning technologies like artificial intelligence (AI) to support such processes.
Insurance And The Gig Economy
The bulk of today’s gig workers source their jobs through online marketplaces and mobile job sites, making digital insurance policies increasingly important as more people than ever take part in the gig economy.
“The solution for the impending rush of the gig economy is in the product … the insurance product and the technology product need to be fundamentally modified,” Bregman said.
That means Verifly must integrate various payment types onto its platform.
“Right now [payments are] all on credit cards. We haven’t actually enabled Apple [Pay], Google [Pay] and other wallets, but we do see [a] future in them,” Bregman said. “We are looking at how we can start deploying them so we can have more payment options for our customers, particularly because the majority of our customers are on mobile anyway.”
Insurers must innovate their approaches as the gig economy moves online, and as this market continues to develop it will need to focus on the needs of its digital consumers.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More