January 26, 2022
Whether it’s providing benefits for gig workers or supporting underinsured communities in catastrophe-exposed areas, there’s a growing realization among organizations of the importance of innovating so that the needs of underserved markets, organizations and industries are met.
Issues affecting the “underserved” range from making sure non-traditional workers have access to vital resources for wellbeing, personal protection and productivity to finding ways to address the risk protection gaps that hinder economic recovery and advancement in areas affected by natural disasters.
“We need to be creating more holistic solutions for the traditionally underserved or newly emerging market sectors, like gig economy workers, which have very specific needs,” says Anne Corona, CEO Asia Pacific at Aon. “The global economy is constantly evolving, and therefore market needs are evolving as well.”
Even though the world economy is evolving, service providers are still tailoring offerings to an outdated notion of how the world operates. Organizations are now expecting increasingly faster, easier, digitally powered and tailor-made solutions.
There are a number of key areas of focus for businesses adapting to ongoing, widespread change.
Supporting Non-Traditional Workers
While the traditional relationship between employers and full-time employees still exists, the number of workers in alternative arrangements is increasing — as is businesses’ reliance on those workers.
“The underserved extends out to individuals who are in these gig kinds of relationships, who are very connected to an employer,” says David Guilmette, CEO of Health Solutions at Aon.
“A software engineer, for example, who is an independent contractor, may have a two-year gig with a company and that company is relying on that individual and their performance, but the programs and support that they provide to their employees does not extend to that gig worker.”
As gig workers become a critical element of many organizations’ business plans, those organizations must consider how they meet those workers’ needs in a way that’s broad-based and addresses the specific circumstances of different workers.
Doing so will help ensure that businesses get the full productivity they anticipated when contracting with those workers.
Closing the Protection Gap
Many communities and regions around the world are also underserved, lacking the protection that can help them recover from catastrophic events.
The difference between the economic losses from a catastrophic event and the amount that’s insured is the protection gap. The global insurance protection gap hit a record $1.4 trillion in 2020, according to reinsurer Swiss Re. Meanwhile, Aon data show that over the past 10 years only about 37 percent of natural disaster losses were insured.
That protection gap not only hinders recovery from disasters, but it can stifle economic development in many regions.
“What holds back lenders and banks from lending to small or medium-sized enterprises in India or Africa and many other regions is that something may happen in terms of an earthquake or a hurricane or a flood that wipes out that local economy temporarily,” says Andy Marcell, CEO of Reinsurance Solutions at Aon. “Therefore, all the loans they’ve made are eroded and disappear. And that could be for something as simple as funding small farms in India to help feed the people and create food independence and resiliency.”
What’s needed are new ways of looking at covering the risk, such as coverages with parametric triggers that will attract investors to help provide a level of protection for those currently underserved communities, Marcell says.
“To the extent that we can corral global capital around a set of parameters to supply coverage against those catastrophic events, which are currently underserved, then we can aid the people that are underserved and the people trying to help them to reach some level of financial security,” says Marcell.
That becomes particularly important as climate change increases the frequency and severity of weather-related disasters in many at-risk regions, Marcell notes.
ESG and the Underserved
The environmental, social and governance (ESG) expectations businesses are facing also increase the pressure to address underserved markets. While the “E” in ESG often gets the most attention, many stakeholders are beginning to look closely at how businesses address the “S,” says Guilmette.
“When you look at the employer-sponsored health benefits that are the way people get healthcare in the United States, under the surface we often find inequities,” says Guilmette. “Businesses are starting to pay much more attention to that because that inequities actually exists within the benefit offerings that they have for their own employee populations.”
Even if they have employer benefits programs available to them, some employees — such as those living in under-resourced communities — might find it difficult to get access to appropriate care.
“There’s a term called social determinants, which is a way of really looking at what else might be in the way of having your population have the same opportunity to take care of themselves and to be healthy for themselves and their families,” Guilmette says.
Many businesses are recognizing that there’s more they can do to help individuals who may live in neighborhoods where there’s less access to primary care, for example. Fact-based assessments can identify areas where those problems might exist for employees, and position employers to partner with benefits providers to address the issue.
Improving Outcomes for the Underserved
The challenges of the underserved markets and sectors of the economy are urgent and real, and it’s important that businesses and society innovate to address them. Finding ways to better serve those individuals and communities can help them — and businesses — thrive.
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