Delivering insurance for the gig economy

The Virgin Media Business Disruptors to Watch 10 list, in conjunction with Fast Track 100, is back.

In a climate of ‘disrupt or be disrupted’, we’re determined to help businesses triumph, and our leading-edge research and round-up of 10 of the UK’s most disruptive companies provides much-needed insight into how it’s done.

We’ve spoken to the movers and shakers in our 10 finalists to find out what makes them tick. And in this instalment, we learn that partnering with larger established firms sometimes makes business sense. Step up Zego…

While working for innovative delivery service Deliveroo, Harry Franks had a lightbulb moment that led him to pack in his well-paid job and establish a disruptive firm of his own.

As Deliveroo’s Head of Global Procurement, Harry was well aware of the insurance issues faced by the company’s ‘riders’. Despite working flexibly, their insurance cover was anything but, with many paying expensive annual premiums, despite only working sporadically.

Flexible work, flexible insurance

Harry and his co-founders went on to establish Zego, which empowers gig economy workers by tailoring insurance to the exact hours they work.

Harry says, “At Deliveroo I saw how flexible businesses wanted people who could work when and how they wanted too. But annual insurance contracts weren’t fit for purpose because they would cover you for the whole time. It made no sense for people who wanted to work just two hours a day or two days a week. We created an insurance product that maps data that moves between your mobile phone and your work provider, and delivers insurance products based on that.”

Cutting edge technology

Fees for Zego’s scooter policy start from 55p an hour, up to £25 a week, while insuring a car starts at £1 an hour. The firm is clearly on to something, attracting 5,500 customers in just over a year. Naturally technology plays a key part in making such a disruptive insurance product possible.

“The insurance is based on the information that flows from someone’s mobile phone to their work provider from the moment they tell the app they’ve started a shift,” says Harry. “It’s that information that we harness in order to deliver the product back to them. Everything is completely app-based and our team of 35 is 50% development. It is all very cutting edge and I think it is only going to develop from here.”

Gigging's on the rise

There are estimated to be 1.1million people working in the UK’s gig economy. The sector has attracted its fair share of controversy, from the risk to Uber’s TFL license to question marks over Deliveroo riders’ employment status. Despite rumblings that the sector has reached its peak, Harry reckons that, if anything, it is only set to grow.

Harry says, “There are 162m people who class themselves as independent workers in Europe and the US. I actually think the biggest challenge for the gig economy is the barriers to entry, one of which is insurance. If we decrease the barriers, then numbers will rise. I think the gig economy can only increase. In this world people want the choice to work when how and where they want. I don’t see that declining.”

Don't bite the hand that feeds you

While disruption is important to Zego’s corporate culture, Harry is quick to point out that its growth is down to working with more established partners, rather than against them.

He says, “The world of insurance hasn’t changed very much in the last century. The on-demand economy has shown there is a blurring between the way people work and the way people need to be insured. The big incumbents’ biggest challenge is their legacy systems. To offer insurance products to an individual on a by-minute basis is really quite complicated.

“Doing that based on systems that have been in place in insurance companies for tens of years is nigh on impossible. We’ve learned that you can’t bite the hand that feeds you and we work with leading global insurance partners like Munich Re, Aviva and Trans Re, as we need their capacity in order to create our innovative and bespoke products.”

Having established one of the UK’s most disruptive insurance companies, what advice does Harry have for other would-be disruptors?

He says, “The hardest part is taking the first step and leaving a really good job and all the security that goes with it. Take risks, go fast, enjoy it and don’t look back.”

We wish Harry and the rest of the Zego team all the best as they continue their disruptive journey. And congratulations to all the firms that made this year’s Virgin Media Business Disruptor 10 list.

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