RGA provides quarterly updates on global product developments, which can be made available upon request.
This issue explores how insurers worldwide are developing products to meet the specific protection needs of freelancers.
View the 2Q 2023 digital newsletter.
A freelancer is defined as a person who pursues a profession without a long-term commitment to any one employer. The reasons for pursuing freelance opportunities are to find greater professional fulfilment, flexibility, and financial stability.
This career path empowers people to take charge of their career trajectory, relying solely on their skills and taking full responsibility for their work, benefits, and, therefore, success. In the wake of the pandemic, freelancer communities around the world have been experiencing continuous growth and have become significant contributors to their respective country’s economies.
Number of Freelancers (in millions) | |||||
| U.S. | Canada | EU | U.K. | |
2021 | 60 | 2.6 | 26.9 | 1.86 | |
According to Upwork's Freelance Forward 2022 study, an estimated 60 million people were engaged in freelance work in the United States, contributing approximately $1.35 trillion to the U.S. economy annually. In 2022, 43% of all Gen Z professionals and 46% of all Millennial professionals performed freelance work.
According to Statistics Canada, there were more than 2.6 million self-employed workers in Canada in 2021, with 33% citing “independence, freedom, or being one's own boss” as a top reason for their employment status. Meanwhile, the number of temporary workers, including contract positions and seasonal jobs, increased by 50% in the last two decades.
As of 2021, there were approximately 26.9 million self-employed individuals in the European Union. In June 2020, Malt and BCG jointly conducted a survey of more than 2,300 respondents across three countries (France, Germany, Spain) to better understand Freelancing in Europe. The study found that freelancers value autonomy, time management, and the freedom of choice in assignments and workplaces. They dedicate more than five hours per week to individual training to remain highly skilled and recognize the importance of continuous professional development to meet market demands.
According to the IPSE Report for 2021, there were approximately 1.89 million freelance workers in the United Kingdom 2021, compared with 1.86 million in 2020. The highly skilled freelancers (SOC1, SOC2 and SOC3) are estimated to provide 45% (£126 billion) of the £278 billion that solo self-employed workers generate.
In Southeast Asia, the exact number of online freelance workers is not available due to the “invisible” nature of this new form of digital labor, as well as limitations to their identification in household labor force surveys and labor registries by national governments. However, estimates show around 1.5 to 2 million online freelance workers in the Philippines, about 170,000 users were registered in major digital freelance platforms in Indonesia (2018), 40,000 were registered platform users in Vietnam, another 40,000 in Singapore, and 20,000 in Thailand.
According to Niti Aayog’s report, ”India’s Booming Gig and Platform Economy,” the freelance workforce is expected to expand to 23.5 million workers in India by 2030 — a nearly 200% growth from the current 7.7 million.
After analyzing global trends, it appears freelancers around the world share some similar characteristics:
Many freelancers still feel like they remain a misrepresented minority whose needs are not properly understood and supported by the state. Despite being able to earn steady incomes, they are still seen as a risky investment when applying for home and business loans, and even when applying for business, life, and health insurance.
In 2023, Legal and General produced a series of reports on the U.S. gig and freelance economy. The fourth part of the report that focuses on freelance workers and their health and life insurance needs found that 23% do not have health insurance and 48% have emphasized their freelance status has negatively impacted their ability to obtain health insurance. Being without health insurance can mean foregoing fulfilling a prescription, skipping a medical test, treatment, or follow-up, and can lead to generally ignoring pain and discomfort because of cost. In this study, only four out of 10 respondents have life insurance.
Due to the American Rescue Plan passed in March 2021, no one will have to pay more than 8.5% of their annual earnings for health insurance, regardless of income.
Traditionally, insurers have offered freelancers insurance products related to their business needs. Such insurance products include workers’ compensation, business owner policies, general liability, professional liability, and cyber insurance. There is a growing trend of digital versions of these products being offered by insurtech companies.
Below is a snapshot of some of the current insurance products offered to freelancers. There is a clear opportunity for insurers to design products that meet freelancers’ specific needs, especially to fulfil retirement and savings needs.
Traditionally, insurers have offered freelancers insurance products related to their business needs. Such insurance products include workers’ compensation, business owner policies, general liability, professional liability, and cyber insurance. There is a growing trend of digital versions of these products being offered by insurtech companies.
In the U.S., Coverdash’s digital insurance experience enables business owners to quote, bind, pay for, and actively manage insurance policies in a matter of seconds. The company is also working on an embedded insurance proposition.
In Europe, Insify offers business insurance in a digital-friendly, streamlined fashion. The startup targets small businesses in the e-commerce, leisure, construction, and IT sectors, among others. Moojo is introducing liability coverage for IT professionals in partnership with Hiscox Germany, with plans to roll out the product to other groups, such as influencers, bloggers, and marketing professionals. Also, in partnership with Hiscox Germany, Hamburg-based freelancer marketplace, Junico, is introducing a new insurance offering. Freelancers accepting and completing projects through Junico will automatically receive professional and business liability insurance at no extra cost. The company’s service fee for completed projects ranges from 10-15%, and users have three coverage options: Basic, Plus, and Complete. The Plus package offers additional protection for anything related to cyber security, and the Complete package includes coverage for work-related belongings such as cameras, computers, and phones.
Bunker, an online instant business insurance platform for independent contractors and businesses, allows workers to purchase insurance for the term of their work contracts, enabling more flexible and meaningful coverage. For example, the company’s occupational accident insurance covers on-the-job accidents that otherwise may not be covered by traditional policies.
Insurtechs have also started to embed these offerings, including Alicia, Jove, and Insured Nomads:
Freelancers now find more digital health insurance products that offer a simple sign-up process without the need for medical checks. Some insurers even provide the option for customers to choose their health and dental insurance coverage. These flexible plans encompass a range of benefits, including dental care, mental health services, massage and physiotherapy, prescription drugs, as well as accidental death or dismemberment coverage.
Freelancers, also known as digital nomads, often work abroad and can now find specialized travel medical insurance products tailored to their needs. These products allow them to access comprehensive health insurance that is valid in any country they are stationed in. Examples in the U.S. include Topcoder and Safety Wing’s Nomad Insurance and Remote Health, which offers a product for remote teams and entrepreneurs. Options like Genki World Resident: International Health Insurance for Digital Nomads and Canada Life offer customizable health and dental plans to this growing segment of freelancers.
Asia is witnessing a rise in flexible health plans. In the Philippines, the startup Kwik.insure has recently introduced KwikCare Health Subscriptions, a healthcare plan targeting freelancers in the country. This new plan starts at P995 per month, with a maximum benefit limit per illness ranging from P50,000 up to P150,000.
Additionally, Gigacover offers employment benefits to Filipino freelancers, contributing to the growing accessibility of healthcare options for this group. Gigacover partners with freelance marketplaces and other companies to provide sponsored benefits and insurance for their freelancers. GigaHealth, the firm’s health insurance plan, offers flexibility and the ability to break down the annual coverage into monthly issuances.
Meanwhile, in India, Plum launched a specialized plan targeting early-stage startups, small to medium-sized businesses (SMEs), and gig workers/ freelance consultants.
Additional insurance solutions for freelancers in Asia include MSIG Insurance’s Freelancer CashPlus in Singapore, offering income protection with daily cash benefits for prolonged illness or injury.
In the Philippines, InLife, along with its HMO subsidiary InLife Health Care, combine term life insurance, hospital income, and healthcare solutions. The insurance package offers three main benefits: six-month term life insurance, daily hospital income for six months, and a one-time emergency care health plan.
Gigacover has expanded beyond Singapore and is now operating in the Philippines with strategic partnerships involving several insurance companies. This move aims to reach the grassroots economy and cater to the needs of millions of workers in micro, small, and medium enterprises. Collaborating with partners Etiqa Philippines and MAPFRE, Gigacover provides a range of life insurance options, including GigaOne for life insurance, GigaWork for income and parcel insurance, GigaHealth for health insurance, GigaDrivefor motor excess reduction insurance, and GigaBundle, a comprehensive insurance package for businesses, including essential care coverage, life and accident insurance, and earnings and income protection. Additionally, Gigacover is exploring the development of products focused on mental health.
In India Reliance General has launched a product for freelance workers, providing coverage for health, personal accident, accidental death, and mobile phone damages. Through partnership with the country’s on-demand convenience delivery platform, the insurance plan extends to cover 300,000 delivery partners nationwide. The insurance plan covers several essential benefits, including OPD treatment, medical hospitalization, maternity cover, and other features based on the eligibility criteria of the master group health insurance policy.
The contribution of freelance workers to the economy is significant. In the future, addressing the insurance needs of freelance workers requires solutions that go beyond just business-focused coverage. Life and health insurance solutions should be designed to cater specifically to freelancers’ chosen lifestyle and individual needs, with a focus on flexibility and customization, preferably offered via a digital channel to enhance accessibility and convenience.
According to gig workers, freelancers face challenges in future financial and retirement planning. More than half of the gig workers (53%) surveyed lack effective access to retirement and savings plans. The disconnect between relatively high levels of financial literacy and concerns about retirement among freelance workers can be attributed to their lack of financial planning, lack of access to retirement savings plans, and often, their young age.
To bridge this gap, fintech innovations can play a vital role, such as investment apps that automatically save small incremental amounts of the user’s choosing. Additionally, offering affordable insurance offerings tailored for freelance workers would be beneficial. Insurers need to closely monitor this space to meet the evolving needs of freelancers in the gig economy.
Flash Report: Tech Gig Workers in the U.S. Gig Economy - https://group.legalandgeneral.com/media/z51m10ue/usgigeconomystudy-flash-report_v01.pdf
The Future of Work - https://www.rsis.edu.sg/wp-content/uploads/2022/04/PR220419-The-Future-of-Work.pdf
Freelance Forward 2022 | Upwork - https://www.upwork.com/research/freelance-forward-2022
Future Workforce Report 2022: Leveraging Independent Talent as a Key Workforce Strategy - https://www.upwork.com/research/future-workforce-report-2022
U.S. gig economy workers aren't meeting their health, life insurance needs - https://group.legalandgeneral.com/en/newsroom/our-research/u-s-gig-economy-workers-gig-workers-aren-t-meeting-their-health-life-insurance-needs
Legal & General U.S. Gig Economy study - https://group.legalandgeneral.com/media/o5hauz5i/usgigeconomystudy-part-4_v03.pdf
HeadFirst Group x Alicia Benefits - https://alicia.insure/cases/headfirst-group/
The Future of Work - https://www.rsis.edu.sg/wp-content/uploads/2022/04/PR220419-The-Future-of-Work.pdf
Health Insurance for Freelancers in the Philippines - https://www.insularlife.com.ph/articles/health-insurance-for-freelancers-in-the-philippines-00000054
