Zego, an hourly insurer for commercial workers of the gig economy, raised over $1.3 million in seed funding to bring its product to delivery drivers and couriers en masse, the company announced earlier this week.
Zego is one of a handful “insurtech” companies trying to innovate the insurance industry. Insurance is typically a product available 24/7, but for those working even fewer hours than part-time workers, it can be an expensive coverage.
Zego initially raised the seed funding in December, but only recently made the announcement. Since then, the insurtech company has been actively hiring. So far, Zego expanded its team to 22 people — up from just three employees — and plans on launching into two European markets within the next six months, Harry Franks, Zego’s chief executive, told Auto Finance News.
“The challenge is, insurance to-date has been designed for a very prescriptive way of allocating or assigning people,” Franks said. “It’s personal or commercial insurance. I think that’s the [kind of] prescriptive mentality that’s been broken by the gig economy — like full-time versus part-time … I think the trend we are seeing now … is the way in which people are working around their own life — their time and their families … and insurance is beginning to see this and set up new products.”
Using an app-based platform, Zego manages all user’s requirements from sales, payment management, and the backend processes, and then links all that data to the insurance providers. The backend platform also automates many of the broker processes, reducing the expenses and additional costs between the insured and the capacity provider. The platforms timestamps when the drivers are working or not working, links that to the insurer, and thus confirms that the drivers have suitable insurance coverage for the work that they are doing. In addition to this, the company will be building out the app to include telematics, Franks said, meaning that Zego can determine the quality of a person’s driving performance.
