The insurance sub-market for the gig economy is expected to fall in the short-term and face more serious consequences in the future if companies follow Just Eat’s decision to classify staff as full-time employees.
The warning, by data and analytics specialist GlobalData, comes as Just Eat reported a 44% surge in revenue to £1 billion in the first half of the year, making it one of the few companies to grow as a result of the Covid-19 pandemic.
The food delivery giant is expected to see high demand for jobs due to large-scale redundancies in the UK economy. Consumers are also expected to continue ordering food in rather than dining out, with lucrative prospects for home delivery companies.
Last month, Just Eat chief executive Jitse Groen announced that he intends to create thousands of jobs after the surge in revenue. He also pledged to end the company’s gig worker model at its operations across Europe with employees receiving benefits and workplace protections.
Insurtechs have generally been strong in the gig economy with start-ups such as Zego and Dinghy establishing a significant presence in the market.
GlobalData insurance analyst Ben Carey-Evans said full-time workers receive significantly more benefits than part-time staff such as gig workers.
“The penetration rate of key products such as private health insurance, healthcare cash and dental plans, critical illness cover and income protection were around double for full-time workers,” he added. “This is on top of the legally required lines of insurance.
“This shows that Just Eat will need to contribute significantly more benefits to its workers now they are full time to meet expectations. It therefore highlights an opportunity for employee benefits to work with a large and vastly growing company.”