Insurance Curator Insurers pilot on‑demand micropolicies for UK gig drivers amid calls for clearer regulatory guardrails
LONDON — Insurers and insurtech firms including INSHUR and Zego are piloting and rolling out on‑demand, usage‑based “micropolicies” for delivery and ride‑hail drivers across the United Kingdom to fill a protection gap that leaves tens of thousands of gig workers uninsured or inadequately covered while working, industry executives and researchers say. The pilots, which have moved from concept to scale over the past 18 months, aim to provide pay‑per‑minute or pay‑per‑mile cover that activates when drivers accept shifts or log on to platform apps; proponents say the products reduce cost and complexity for part‑time drivers, while critics and unions say clearer regulatory guardrails and platform responsibilities are needed to protect workers and consumers. (inshurgroup.com)
Insurtech INSHUR, which supplies an in‑app “Pay as you Flex” wallet to Amazon Flex delivery partners that charges drivers only for minutes worked, announced in mid‑2025 that it had reached more than 25 million hours of coverage through that product and sold more than one million UK policies — milestones it cited to show micropolicies can be scaled in advanced markets. “We’re building the future of insurance for the on‑demand economy, and we’re just getting started,” David Daiches, INSHUR’s group chief operating officer, said in the company announcement. INSHUR’s integration with Amazon Flex and similar embedded arrangements let insurers price and trigger cover against platform data reporting actual work hours, avoiding the underuse and policy voids that have historically left many drivers exposed. (inshurgroup.com)
London‑based Zego, an early pioneer of fractional and hourly motor cover for couriers and food riders, has long marketed minute‑ and hour‑level policies and is expanding into broader commercial motor lines after proving the model in the gig market, its chief executive told Insurance Times. “The gig economy has been a great testing platform, it’s a niche market to see how our concept and infrastructure works,” Sten Saar said, underlining the way insurtechs view gig work as a live laboratory for on‑demand insurance engineering. Legacy carriers and broker networks have been monitoring these pilots closely and are experimenting with embedded and usage‑based variants for existing product lines. (insurancetimes.co.uk)
Why insurers are moving now
The shift to micropolicies is driven by scale and economics: the UK and other advanced markets now host millions of platform‑based assignments every week, yet many people who work intermittently for delivery and ride‑hail platforms have either the wrong cover or none at all when performing paid tasks. Industry and market research published in 2024–25 shows a substantial protection gap among delivery riders and drivers; one specialist insurance analyst cited by Life Insurance International reported that more than 40% of gig‑economy delivery workers remain uninsured while on the job, and that many who buy cover do so by misunderstanding whether their standard social, domestic and pleasure (SD&P) motor policy remains valid while they are working. That has made the case to underwriters for short‑duration, highly automated products that align premium with actual exposure. (lifeinsuranceinternational.com)
Academics and worker‑rights groups also point to health, safety and economic stress that make insurance gaps more consequential. A 2025 study led by the University of Cambridge found high rates of anxiety, injury risk and unpaid logged‑on time among UK delivery and ride‑hail workers; three‑quarters of respondents said they feared income drops, and more than half reported risking health and safety while working. The study’s authors concluded that platform management and opaque algorithmic work allocation intensify economic dependence while leaving workers uncertain about access to protections such as insurance and sick pay. (phys.org)
How the micropolicies work
Micropolicies are delivered in several technical forms: time‑based wallets that debit minutes or hours from a prepaid balance; mileage‑based tariffs that charge per mile driven; and event‑triggered microcontracts that activate for a single delivery, trip or shift. Integration with platform APIs — and sometimes with platform earnings and scheduling data — enables insurers to validate when cover should be active and to bill drivers automatically. The products rely heavily on automation: near‑instant quotes, digital issuance, real‑time triggers and simplified claims intake. INSHUR’s Amazon Flex wallet, for example, credits a driver’s account with a block of insured minutes and deducts actual minutes worked based on data Amazon sends to the insurer. Zego and other insurtechs use in‑app flows and telemetry to ensure cover follows the worker’s activity. (inshur.com)
Usage and market signals
Usage‑based motor offerings have moved beyond pilot stages in the UK. Pay‑by‑mile insurer By Miles sold tens of thousands of policies and was later acquired by a mainstream motor group, illustrating mainstream appetite for mileage‑sensitive pricing. Industry reporting and market forecasts show on‑demand insurance growing globally at double‑digit rates, with analysts projecting the market for micro and embedded on‑demand products to expand materially over the next five years as platforms and insurers embed protection at the point of work. The business case for micropolicies rests on low acquisition cost through platform partnerships, fine‑grained risk segmentation enabled by data, and the ability to price previously unserved hours at rates that are affordable for part‑time workers. (insurance-edge.net)
Voices from industry, workers and unions
Industry executives frame micropolicies as pragmatic problem‑solvers. David Daiches of INSHUR described pay‑per‑minute wallets as a “win‑win‑win” for drivers, platforms and insurers because drivers only pay for hours driven, platforms can offer partners a value‑add, and underwriters get better exposure measurement. Zego’s executives argue that fractional cover unlocks meaningful income opportunities for people who cannot afford annual policies. (inshurgroup.com)
Workers’ groups and researchers say cover alone is insufficient. Fairwork and academic audits of platform practices have repeatedly found platforms falling short on minimum protections for drivers, including fair pay, contractual clarity and adequate task‑related safety measures. “Platforms are still failing to provide minimum protections for UK gig workers,” Fairwork concluded in a 2025 report that assessed dozens of platforms for fair‑work criteria. Unions such as GMB and the Independent Workers’ Union of Great Britain have also pressed for clearer responsibilities from platforms and better statutory protections; researchers warn that without clarity on who bears employer‑style obligations, insurance becomes a band‑aid for deeper structural insecurity. “Classifying someone as self‑employed doesn’t change the fact that they can be economically dependent and exploited,” an academic lead on the Cambridge study said. (fair.work)
Regulatory friction and the need for guardrails
The expansion of micropolicies has illuminated regulatory questions in Britain and other advanced jurisdictions. Consumer protection authorities have historically been attentive to embedded insurance and add‑on sales, while prudential and market conduct regulators are exploring how automated underwriting, continuous pricing and data‑driven triggers fit into existing rulebooks.
The UK Financial Conduct Authority runs an innovation hub and regulatory sandbox that have helped insurtechs test new models and clarify obligations, but lawmakers and industry groups are increasingly urging firmer public guidance on the responsibilities of platforms, the definition of when someone is “working” for insurance triggers, and data‑sharing standards between platforms and insurers. In parallel, the insurance sector has warned that changes in vehicle technology — particularly the UK government’s push to pilot driverless passenger services under the Automated Passenger Services permitting scheme — require clearer allocation of liability if a vehicle in autonomous mode causes harm; under current rules, insurers often remain the first payers in motor claims, raising questions about subrogation and liability between operators, manufacturers and insurers. Industry voices say those overlaps must be settled well before automated fleets scale. (scribd.com)
Risks insurers face
Micropolicies are not a regulatory or actuarial panacea. Short‑duration, low‑premium products change the risk and cost profile: administrative expenses per policy can be high unless processes are highly automated; frequent small claims increase fraud and claims‑management complexity; and adverse selection may concentrate high‑risk hours in particular cohorts if pricing does not accurately reflect exposure. Data privacy is a further friction point: usage‑based pricing often depends on location, trip and performance telemetry, and regulators and consumer advocates have pressed for transparency on how insurers use, store and share such data. Legal uncertainty about worker status also complicates insurer decisions on cover limits and exclusions when liability questions arise between a driver, a platform and a third party. Legal and actuarial literature on on‑demand insurance stresses that clear contract terms, robust fraud controls and close platform integration are preconditions for commercial viability. (scribd.com)
Capacity and distribution
Insurtechs frequently rely on underwriting capacity provided by established insurers or underwrite as managing general agents (MGAs), and capacity constraints can limit rapid expansion. Zego’s early models were underpinned by panels of capacity providers and later by direct licensing, while By Miles grew with backing from larger carriers. Partnerships with platforms — either via white‑label embeds or links in platform apps — are the primary distribution channel for micropolicies; that makes platform acceptance and cooperation a commercial necessity. Where platforms provide data feeds for hours or earnings, insurers can automate pricing and billing; when such integrations are absent, friction and disputes over when cover should have applied can arise, producing consumer complaints and operational stress. (insurancetimes.co.uk)
Practical limits: worker testimonies and operational glitches
Operational experience has exposed pain points. Public forums and rider support groups show examples where app links to insurance offers fail, or where disputed hours lead to temporary coverage gaps while data is reconciled. Regulators and consumer organizations have flagged that some drivers remain unaware that their SD&P personal policies are often void the moment they accept paid tasks, leading to surprise when incidents occur. These practical frictions underline calls from worker advocates for stronger defaults — for example, platform‑provided default cover during shifts or clearer platform liability — rather than expecting every worker to navigate micropolicy marketplaces. (reddit.com)
What needs to change: industry and policy options
Industry participants and labour advocates converge on several policy and market design fixes:
- Standardise definitions and triggers: Regulators could clarify when a worker is “on duty” and which data signals legally trigger insurance cover. That would simplify contract language and reduce disputes over activation and subrogation.
- Require basic platform obligations: Minimum task‑related protections — safety equipment, incident reporting, and basic short‑term insurance or pooled compensation — could be codified so that cover is not a purely individual responsibility.
- Strengthen data‑sharing standards: Secure, auditable APIs between platforms and insurers would reduce friction, cut disputes and speed claims handling, while privacy frameworks would govern how telemetry is used for pricing.
- Encourage sandboxes and scaling standards: Continued regulatory sandboxes can let new models be tested at scale with consumer protections and predefined exit triggers, helping establish best practice before mass roll‑out.
- Design for financial inclusion: Pricing frameworks and distribution mechanisms must avoid excluding older drivers, those with spotty records or limited smartphone access — groups that could otherwise be left behind by purely app‑centric solutions. (scribd.com)
Outlook
Micropolicies and embedded on‑demand insurance are no longer experimental curiosities in advanced markets; they are operational products deployed at scale for specific platform partnerships and segments of the gig workforce. Market forecasts suggest continued double‑digit expansion of on‑demand insurance globally as platforms, insurtechs and incumbents pursue embedded distribution and usage‑based pricing. Yet expansion without clearer legal and regulatory guardrails risks leaving workers exposed to coverage gaps and creating operational uncertainty for insurers and platforms alike. As one industry executive put it in published remarks, pilots that scale to mainstream usage require “strong relationships with capacity providers” and “agile tech‑driven setups” — and, crucially, rules that define responsibilities when the money and the liability change hands. (inshurgroup.com)
Reporting: This article drew on company statements and product pages from INSHUR and Zego, coverage and analysis from Insurance Times and other industry outlets, academic reporting summarised via Phys.org from a University of Cambridge study, and market research commentary on on‑demand insurance trends. Where organisations published figures or direct quotes, those are attributed in the text. (inshurgroup.com)