Gig economy and new demands on income protection
According to a recent study by Henley Business School of Africa - titled “What is the future of work in South Africa? Examining the side hustle economy” - more South Africans than ever before are today juggling more than one job. More than a quarter of the just under 1160 people who took part in the study, indicated they were involved in a “side hustle”.
The trend looks set to continue on an upward trajectory, with African Business predicting that freelancers could by, as soon as next year, make up 50% of the country’s full-time workforce. This as more and more South Africans seek out secondary sources of income to mitigate the impact of a sluggish economy and the rising cost of living on their pockets. And as opportunities for those looking to freelance continue to grow.
Businesses today are more alive to the idea of outsourcing their work, largely, as a result of technological advances made in the past few years. Interconnected work ecosystems allow for companies and teams to be spread across countries and even continents. The advent of social media also makes it cheaper and easier than ever before to market yourself.
The growth of the gig economy could help power South Africa’s growth, and the important role it’s poised to play in the country’s future was highlighted at the 28th World Economic Forum on Africa - which took place in Cape Town in September - where this was one of the topics up for discussion.
For those working in the gig economy, it offers greater flexibility, more control over how and when you work and (of course) the many perks associated with having multiple income streams. But what it doesn’t always offer, are the benefits - such as a medical scheme and paid time-off - that come with traditional full-time employment.
This makes those working in the gig economy particularly vulnerable, should they become ill or injured and, as a result, unable to work and this places new demands on income protection insurance.
Income protection insurance is designed to help you maintain your current lifestyle in the event of injury, illness or retrenchment and is a vital part of your overall financial well-being and security - especially as a participant in the gig economy.
A traditional income protection insurance policy only covers one income stream which means multiple income streams require multiple policies. Historically, this hasn’t impacted most people because most people have been working traditional “Monday-to-Friday, 9-to-5 jobs”.
As evidenced above, though, this is changing and in order to remain relevant, income protection insurance needs to change too.
Insurers need to adapt to the changing economic landscape by upping their game to accommodate the evolving needs and lifestyles of the country’s workforce.
Off the back of these emerging trends, Liberty has updated its income protection insurance offering, so that for the first time in the long-term insurance space, clients can enjoy income protection insurance for not just one occupation, but two - all under the same policy.
To quote British-American computer programmer and businessman John McAfee: “The gig economy is empowerment. This new business paradigm empowers individuals to better shape their own destiny and leverage their existing assets to their benefit.”
In order to truly harness the potential of the gig economy to change the lives of vast swathes of the population, however, insurers and financial services providers across the board need to recognise that the gig economy doesn’t look to be going anywhere anytime soon and will require them to adapt their offerings to reflect that understanding.
Graham Easton is divisional executive for research and insights at Liberty.