Income protection insurers need to create tailored policies for self-employed, gig, and zero-hour contract workers that acknowledge uncertain incomes and potential periods of unemployment, according to GlobalData, a leading data and analytics company.
According to GlobalData’s 2017 UK Insurance Consumer Survey, the self-employed were 7.1 percentage points more concerned about saving money for a comfortable retirement (30.7%) than those in full-time employment (23.6%). Paying monthly bills was also a greater concern.
Danielle Cripps, Financial Analyst at GlobalData, comments: “Individuals with uncertain incomes are more vulnerable and concerned about their finances, creating demand for tailored products.”
The opportunity is large, as there are 4.86 million self-employed individuals in the UK, accounting for 15.1% of the working population, according to the Office for National Statistics (ONS).
The Chartered Institute of Personnel and Development estimates there are approximately 1.3 million people (4% of all in employment) working in the gig economy in the UK. The ONS states that there are also 0.9 million UK workers with a zero-hour contract for their main job.
“Income protection insurers must adapt their offerings for these individuals. The protection industry is intent on boosting financial resilience in the UK, and designing products tailored for the most economically vulnerable is a vital step towards narrowing the protection gap.
“More employers are looking towards an on-demand workforce, and the UK’s entrepreneurial environment is also causing a rise in self-employment. Growing income protection sales for these individuals represents a significant opportunity for protection insurers.”