How the Gig Economy Has Created an Insurance Gap—and How You Can Fill It

The rise of the gig economy has transformed the way millions of consumers earn a living. From ridesharing and food delivery to freelance digital services, gig work continues to grow in popularity. Yet, with this shift comes an increasingly visible problem: the lack of adequate insurance protection for gig workers. This gap presents both a challenge and an opportunity for financial institutions to step in with innovative solutions.

The Rise of the Gig Economy

Over the past few years, participation in the gig economy has grown significantly. In the U.S., as many as 36% of workers now participate in alternative or “on-demand” arrangements such as gig work, freelancing, or crowd work.

Consumers are drawn to gig work for flexibility, supplemental income, and independence, often using it to balance family obligations or pursue entrepreneurial goals.

However, this flexibility comes at a cost. Unlike traditional employment, gig work typically doesn’t provide benefits such as health insurance, disability coverage, or retirement planning. This shift has compelled consumers to manage financial and personal risks primarily on their own, resulting in a widening gap in protection.

The Insurance Gap: What’s Missing?

In traditional employment structures, organizations typically offer options for coverage for a range of basic needs, including medical coverage, paid time off, disability benefits, and sometimes even life insurance. Gig workers, however, rarely have access to these protections.

Recent studies highlight three main gaps:

• Health insurance: A nontrivial number of gig workers are uninsured or under-insured. According to FinMasters, about 24% of gig workers lack health insurance in the U.S.
• Disability and income protection: With no employer safety net, an accident or illness can quickly devastate financial stability.
• Retirement and long-term planning: Without employer-sponsored plans, gig workers must navigate complex, self-managed savings options.

These gaps don’t just affect individual workers—they ripple out to families, communities, and the broader economy.

Why the Gap Matters for Institutions

For banks, credit unions, and retail affinity partners, the insurance gap is more than a societal issue—it’s a chance to provide meaningful value to consumers. Gig workers represent a growing consumer segment with unique needs.

• Demand for flexibility: Consumers are seeking insurance options that match their non-traditional lifestyles.
• Opportunity for differentiation: Institutions that provide tailored supplemental solutions can build deeper trust and loyalty.
• Long-term relationships: By addressing unmet needs today, organizations can strengthen consumer connections that extend well beyond gig work.

This approach meets consumers where they are—inside the apps and platforms they already use, through trusted financial institutions, and across multiple channels—while positioning organizations as proactive partners in their economic well-being.

Using Data and Embedded Insurance to Personalize Coverage

One promising way to address the insurance gap in the gig economy is through digital integration—making insurance offerings seamless, accessible, and aligned with the lifestyle of gig workers.

• Trust and support: Embedding offers into institutions gig workers already trust—such as their bank, credit union, or affinity partner—adds credibility. Coupled with responsive customer service that prioritizes flexibility and efficiency, institutions can deliver real value.
• Ease of administration: Simplified enrollment and straightforward policy management are critical. Digital integration enables consumers to easily compare options, sign up, and manage policies without friction.
• Omnichannel marketing: Gig workers are busy and value ease. By providing insurance offers through both digital channels and direct mail, institutions allow consumers to engage when and how it works best for them. This omnichannel approach gives workers flexibility—whether they prefer handling things online, on the go, or through more traditional channels.
• Data insights: Financial institutions already hold valuable data about consumer transactions, spending habits, and life stages. When analyzed responsibly, this data can uncover gaps in protection and identify personalized coverage opportunities. Gig workers, in particular, leave a strong digital trail by using multiple apps, platforms, and digital resources, which makes personalization especially valuable.

Digital Integration: Meeting Gig Workers Where They Are

Research and Trends to Watch

The insurance industry is beginning to recognize the scale of this challenge and the need for financial institutions to get ahead of it before it gets even bigger.

• LIMRA and EY research estimate that approximately one-third of the workforce participates in the gig economy to some extent, and that in five years, up to 29% of the workforce could rely on gig work as their primary income source. This highlights the increasing scope of the population affected by the insurance gap.

• Deloitte research shows that embedded finance presents a significant growth opportunity, particularly when tailored to segments that traditional financial services have historically underserved.

• McKinsey research indicates that embedded insurance is a growth area globally, with innovation in data architecture and validation central to enabling these models.

These findings underscore the urgency—and the opportunity—for institutions to take action.

A Path Forward

The gig economy isn’t slowing down, and neither is the insurance gap it has created. For financial institutions, this is a pivotal moment to deliver solutions that are flexible, personalized, and consumer-first. By leveraging data and embracing embedded insurance strategies, organizations can close protection gaps while building lasting, trust-based relationships.

At Franklin Madison, we’re helping institutions explore innovative approaches to supplemental insurance, ensuring they can meet today’s changing consumer needs head-on.