IN recent years, Malaysia has witnessed a substantial transformation in the way Malaysians approach work.
The rise of the gig economy and the emergence of innovative work models have reshaped the traditional notions of employment.
The gig economy and contract work, defined as freelance jobs that offer flexible and temporary work for individuals, is mediated through online platforms or digital economy companies (DECs).
This transition, while empowering, exposes workers to a unique set of risks, particularly when it comes to occupational safety and employee protection.
Incidents and accidents involving gig workers have seen a noticeable uptick in recent years. PERKESO’s accident statistics within its self-employment scheme reported 1,872 cases in 2022, equating to approximately five cases per day.
This also represents a steep increase of 158.9% compared to 723 cases reported in 2021.
These incidents, ranging from minor mishaps to fatal accidents, underscore the pressing need for a safety net for gig workers who lack the safety nets typically provided by traditional employment, such as workers' compensation and employer-provided insurance policies as laid out in the Finance Ministry’s annual economic outlook report1.
To address this on the home front, the government has implemented various initiatives to encourage informal sector workers, including gig economy workers, to register and contribute to the Social Security Organisation (SOCSO).
One of these includes providing up to 80% in incentives to SOCSO contributors under the Social Security Scheme for the Self Employed, as well as appointing a corporate agent to facilitate the process for these workers to contribute to the Skim Keselamatan Sosial Pekerjaan Sendiri (SKSPS).
The dilemma of affordability
While insurance plays a pivotal role in safeguarding individuals against unforeseen circumstances, financial constraints often emerge as a primary deterrent for gig workers from the lower-income bracket.
The United Nations Capital Development Fund (UNCDF) found, in its Gig Economy and Financial Health: A Snapshot of Malaysia and China report2, that the substantial monthly premiums represent a significant burden, which explains why gig workers tend to have limited adoption of advanced financial products such as insurance and investments.
For those in the lower income brackets in Malaysia, it becomes less of an option as they are met at a juncture between immediate needs and future security.
Think tank, The Centre, wrote an article revealing that there are approximately 600,000 individuals working as e-hailing and p-hailing riders across the country, however, only about 230,000 have contributed to SOCSO.
A study involving more than 400 e-hailing drivers and delivery riders revealed that 76% lack unemployment insurance, 59% have no retirement savings, 59% do not possess emergency funds, 57% are without healthcare coverage, and 37% are not protected in case of a workplace injury.
This glaring discrepancy underscores the stark reality faced by a substantial portion of gig workers when it comes to having protection against any misfortune or financial security.
The vision for inclusive protection
As the gig economy landscape continues to evolve in Malaysia, protection emerges as a critical safeguard that acts as a financial buffer, offering reassurance and stability in the face of unforeseen challenges.
Solutions and products should be designed to enable effective cash flow management for gig workers without imposing restrictions on their daily lives as income instability remains a top source of worry for gig workers, as noted in the UNCDF report3.
Acknowledging the specific vulnerabilities and aspirations of gig workers, specifically those in the e-hailing industry, insurance company Chubb has customised a range of flexible policies and innovative solutions that cater to the distinct requirements of this demographic, ranging from car insurance to personal accident protection.
Pioneering change through partnerships
Grab, one of Southeast Asia’s leading superapps, recognises that drivers and delivery-partners are an integral part of the ecosystem that serves the community, and has partnered with Chubb to provide innovative in-app insurance solutions throughout Southeast Asia since 2018.
This collaborative effort offers over 2.6 million Grab driver-partners access to accident, hospitalisation and other critical insurance coverage through the Grab driver app.
In addition to this, Grab Malaysia and Chubb have worked to co-create Grab Daily Insurance, a product specifically designed to meet the regulatory requirements of an e-hailing insurance policy, while taking into account drivers’ financial means. Grab Daily Insurance allows drivers the option to select daily insurance or takaful coverage when they log into the app, with 24-hour validity.
Most recently, Chubb has also co-created insurance products with Grab Malaysia including:
> Group Personal Accident (PA) Insurance first-of-its-kind personal accident insurance for both drivers and passengers in the ridesharing industry, with zero deductible and no additional cost.
> Personal Accident Plus Insurance Programme (PA+): a low-cost insurance plan specially designed for Grab’s drivers and delivery partners to keep them and their families safe anytime, anywhere.
>Insurance Kemalangan RPG 24/7:personal accident insurance tailored for delivery partners to help protect them while delivering GrabFood, GrabMart and GrabExpress.
This signifies not only a substantial increase in the level of protection afforded to various gig workers, but also highlights the potential for positive change when the industry joins forces in pursuit of a common goal - enhancing the protection and well-being of those within the industry.
As Malaysia's work landscape continues to undergo a transformative shift towards gig employment, the call for robust protection for gig workers has never been more pressing. This dynamic landscape necessitates cooperation between the public and private sectors.
In navigating the evolving needs and definition of the gig workforce, it’s clear that enhancing the safety and well-being of workers is paramount.
This article was contributed by Chubb Insurance Malaysia Berhad
- Malaysia’s Economic Outlook 2020 (pp. 76)
- The Gig Economy and Financial Health: A Snapshot of Malaysia and China (pp.14)
- The Gig Economy and Financial Health: A Snapshot of Malaysia and China (pp.12)