Meeting the evolving security needs of Malaysia’s dynamic workforce

In recent years, Malaysians’ employment concepts have undergone great changes. The rise of the “gig economy” and innovative work models has upended people’s views on traditional employment. The “gig economy” and contract work refer to flexible, flexible and temporary freelance work opportunities available through online platforms or digital economy companies (DECs).

Although this new employment model creates job opportunities, it also exposes employees to unique risks, especially in terms of occupational safety and employee protection.

Accidents involving gig workers have increased dramatically in recent years. According to data from the Social Insurance Agency (Perkeso), a total of 1,872 accidents occurred among self-employed employees in 2022, equivalent to 5 accidents per day. Compared with 723 cases in 2021, this is a significant increase of 158.9%.These incidents, which range from minor mishaps to fatal accidents, illustrate the urgent need for a safety net among gig workers who lack the occupational safety nets enjoyed by traditional workers, such as workers’ compensation and employer-provided insurance.^[1].

To address this problem, the Malaysian government has launched a number of programs to encourage workers in the informal sector, including gig economy workers, to register with the authorities and join the Social Security Organization (SOCSO). One is the Self-Employed Social Security Scheme that provides up to 80% incentives for SOCSO members, and the other is the Self-Employed Social Security Scheme (SKSPS) that appoints companies to act as agents for these employees.

The affordability dilemma

Insurance plays a key role in protecting workers from the unexpected, but low-wage gig workers are often uninsured due to financial constraints.High monthly premiums have become a heavy burden for them, which explains why gig workers tend to selectively purchase advanced financial products such as insurance and investments^[2].

For low-income groups in Malaysia, when immediate needs conflict with future protection, insurance is no longer an option. There are approximately 600,000 e-hailing and motorcycle food delivery and parcel service employees in Malaysia, but only about 230,000 have joined SOCSO. A study of more than 400 e-hailing drivers and delivery people showed that 76% had no unemployment insurance, 59% had no retirement savings, 59% had no emergency funds, 57% had no medical insurance, and 37% had no occupational injury protection. This stark disparity illustrates the stark reality that a significant portion of gig workers face when it comes to protection against misfortune or financial security.

A vision for inclusive security

As Malaysia’s gig economy continues to grow, security has become key to a financial cushion, providing peace of mind and stability in the face of unforeseen challenges.The biggest concern for gig workers remains income instability, so solutions and products must be designed to provide them with efficient cash flow without disrupting their daily lives^[3].

Recognizing the unique vulnerabilities and aspirations of gig workers in the e-hailing industry, Chubb has customized a series of flexible policies and innovative solutions to meet their unique needs, from car insurance to personal accident protection.

Leading change through collaboration

As one of Southeast Asia’s premier super apps, Grab understands that e-hailing drivers and delivery partners are an integral part of the social ecosystem it serves, and has therefore partnered with Chubb since 2018 to launch innovative in-app insurance solutions in Southeast Asia plan. Through the Grab driver app, this partnership provides accident, medical and other important insurance coverage to more than 2.6 million Grab driver partners.

In addition, Grab Malaysia has partnered with Chubb to launch Grab Daily Insurance, a product designed to meet regulatory requirements for e-hailing insurance policies while taking care of the financial needs of drivers. Grab Daily Insurance allows drivers to choose between 24-hour daily insurance or takaful insurance after logging into the app.

Recently, Chubb has also teamed up with Grab Malaysia to develop insurance products, including:

1. Group PA:The first personal accident insurance for drivers and passengers in the ride-sharing industry, with zero deductible and no additional fees.
2. Personal Accident Plus Insurance Program(PA+):Affordable insurance plan specially designed for Grab drivers and delivery partners to protect them and their families anytime, anywhere.
3. Insurance Kemalangan RPG 24/7:Personal accident insurance tailored for GrabFood, GrabMart and GrabExpress delivery partners.

Not only does this mean a significant increase in protections for all types of gig workers, it also highlights the potential for positive change when the industry comes together to pursue common goals to enhance the protection and wellbeing of workers.

As Malaysia’s job market continues to transform into a gig market, there are growing calls for strong protections for gig workers. This dynamic landscape requires cooperation between the government and the private sector.

To meet the evolving security needs of gig workers, it’s clear that enhancing employee safety and well-being is the way to go.

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^[1] Malaysia’s Economic Outlook 2020 (pp. 76)

^[2]The Gig Economy and Financial Health: A Snapshot of Malaysia and China (pp.14)

^[3]The Gig Economy and Financial Health: A Snapshot of Malaysia and China (pp.12)

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