By definition, the gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments.
In Vietnam, as an increasing trend among the new graduates and preference for those who opt for flexibility, being in the gig economy or working as freelancers trigger concerns about new regulatory challenges, taxation, rights, and social protection for gig workers. More and more Vietnamese academic employees opt for freelance work. In fact, up to 53% of academic staff have participated in the gig economy, per the December 2021 data from Anphabe, social networking service and employment website in Vietnam.
While Vietnam shows rapid and remarkable growth in digital platforms for employment and service delivery, no official definition or established regulations have been conceptualized and put into motion.
For one, lack of microfinance solutions for the gig workers, or financial services for the underserved. However, for the most hardworking yet underserved sector, getting access to protection and investment is only for the rich and for those who can afford to spare extra amounts from their income. Not to mention financial services are not nearly as accessible as they ought to be.
After NTUC Income has successfully implemented innovative, lifestyle-based microinsurance products like Droplet and SNACK to fit the needs of increasingly digitally-savvy customers in Singapore, they have expanded to Vietnam to offer the same kind of service for the Vietnamese gig workers.
With NTUC Income, financial inclusion comes in. It would mean individuals and businesses can use affordable financial products and services that meet their needs – transactions, payments, savings, credit, and insurance – delivered responsibly and sustainably.
During NTUC Income’s inaugural Innovation Day on March 25, they launched a platform where conversations and exchange of ideas are initiated to improve financial access within digital ecosystems.
To tell us more about Income’s mission to provide access to affordable insurance for the gig workers as well as the partnership they have sealed in Vietnam, Vietcetera met with Edlyn Khoo, Deputy Vice President of NTUC Income, Phan Hong Minh, CEO of JupViec, and Bui Xuan Thu, Chief Executive Officer of Post & Telecommunication Joint Stock Insurance Corporation (PTI).
Tell us about your role at Income and what are your priorities in the Vietnam expansion?
Edlyn: My mandate at Income is to grow the regional digital business. Coming to Vietnam, our first order of business is to promote economic growth in the new normal. We need to appreciate the trend of digitization and accelerate the development of technology products and services to meet the digital consumption needs of consumers. I believe the combination of digital technology, insurance, and finance is meaningful and highly anticipated because it brings solutions to protect health and build finance and effectively.
Tell us more about Income’s IaaS model?
Edlyn: Our IaaS platform folds Income’s capabilities and experience in launching, executing, and scaling insurance innovations in Singapore into a holistic offering for our strategic partners and value-add to their portfolio of products and know-how to grow new customer segments and revenue streams with agility, speed and connectivity to digital ecosystems. For example, partners can benefit from Income’s innovation in product construct, dynamic pricing, and instant claim payout.
This model allows Income to test-bed, pivot, and scale new insurance propositions with agility and speed with partners via a win-win proposition leveraging Income’s innovations, market roll-out experience, as well as tech and ecosystem know-how.
Income is relatively new in Vietnam. How do you intend to approach the Vietnamese market?
Edlyn: To us, expanding overseas opens a new chapter of growth for Income. It is part of our strategic growth plan. In Vietnam, we partner with local insurance companies and digital platform owners. We help drive higher engagement with customers through innovative digital products by partnering with them. We leverage their massive data advantage with digital platform owners to understand customers’ lifestyles and contextualize relevant products. In tandem, these drive strong customer loyalty for both our partners, with us serving as a connector role.
Your mission is to create access to affordable insurance for all — how do you plan to introduce that to the Vietnamese gig workers specifically?
Edlyn: Like what our CEO, Mr. Andrew Yeo, said, “Income’s purpose is to empower better financial well-being for all, and to offer insurance access even to the underserved amongst us. We aim to stay committed to our cause even as we plant our flag abroad.”
We take pride in successfully implementing innovative, lifestyle-based microinsurance products in Singapore, with growing traction among digital-first consumers and gig economy workers such as Grab drivers and Foodpanda food delivery riders, who would otherwise have limited options to bridge protection gaps.
Technology has enabled the rise of the gig economy, where jobs can now be on-demand instead of fixed and traditional roles. Vietnam’s large geographic distribution area, young and digital-first populations, and high mobile penetration rates make them primed for tech-enabled digital insurance propositions. More people will increasingly live their lives in a few digital ecosystems.
From the get-go, whether we’re in Singapore or Vietnam, we hope to encourage young people from an early age to be financially aware, acquire knowledge, skills, attitudes, and behaviors necessary to make sound financial decisions, and ultimately achieve economic well-being and resilience. The insurance innovation Income will help empower digital natives, build financial stability, and nurture a culture of financial inclusion in our growing platform universe.
The current pandemic has forced many insurers to review their strategy, particularly with the digitization of the business. What are some of your expectations and/or hopes for the industry post-COVID-19?
Edlyn: We launched our inaugural Innovation Day in Vietnam on March 25, and to us, this marks the beginning of a series of Innovation Days we have planned in the region. We are confident that, through building financial awareness, understanding new solutions, and partnering with like-minded market shapers to embrace the extraordinary shift in Vietnamese consumer behavior, Vietnam will be a more financially savvy society in the time to come. Income looks forward to replicating similar successes with partners of our same shared vision to serve the financial needs of Vietnamese consumers.
Gig workers are especially vulnerable and can be exposed to dangerous situations. Where does the coverage for the gig economy start?
Phan Hong Minh: Gig workers are frequently exposed to dangerous situations. For instance, under “personal accident,” a maid staff in JupViec could be on the way to start her on-demand shift as usual and, unfortunately might be involved in an accident, for example. It is enormously essential to cover medical expenses, dental benefits, or even a fixed indemnity. Coverage with additional family benefits could help them tackle these expenses.
The other one is “temporary incapacity.” There is a high probability that a gig worker is unable to work for a considerable time, a couple of weeks or even months, they will soon encounter financial problems. Temporary incapacity coverage could greatly benefit in this time. It might be in the form of a daily allowance for a specific period to protect their income.
Sickness is also an additional possible risk to cause temporary incapacity. After all, if a gig worker is sick and can't go to work, they end up with a difficult financial situation after an accident.
We are aware that on-demand maid staff faces other issues, and for that, we have “general liability.” This is for when they would need to purchase insurance to cover any damages they could cause to a third party while on the job. Many maid staff who only work a couple of hours per month might never get such coverage because it's beyond their affordability — however, they're exposed to real risk.
How do you think the gig economy is shaping the future of insurance culture?
Bui Xuan Thu: Gig workers are a more vulnerable group than other full-time employees because they are not entitled to company benefits and health and social insurance. Therefore, there should be more suitable insurance products to meet the needs of the gig workers and, at the same time, contribute to social stability, reducing financial and medical burdens for the government.
How does micro-insurance benefit the gig economy?
Thu: Micro-insurance is insurance products with reasonable premiums and benefits, especially suitable for customers with low and unstable incomes. Meanwhile, the number of workers in Vietnam, especially manual and gig workers paid by the hour, is vast. Therefore, I think that micro-insurance will be the perfect choice for this group, who are constantly faced with a tight salary and minimal expenses to cover their lives.
What are some of your initiatives in creating access to affordable insurance for all?
Thu: PTI aims to become an insurance business for the community. Therefore, we always try to do research and develop insurance products for the "community" so that all Vietnamese people, including the poor labor force, still have the opportunity to access suitable insurance products. Currently, there are few insurance companies targeting this group of customers, while these are the most "vulnerable" ones.
Currently, we have established an R&D (research and development) department to analyze the different needs of our customers, thereby being able to offer products that meet their requirements and accessibility to insurance. For freelancers, in addition to providing the right products for their needs, we also simplify the compensation process so that freelance workers can easily submit a claim in just a few minutes with simple procedures.
With the cooperation between PTI and NTUC Income - an insurance company that has successfully launched and sold micro-insurance products - there will undoubtedly be many suitable insurance products for people, especially the gig workers soon.
I believe that when the customer's needs are met, they will come to insurance companies by themselves.