If you are a regular reader of Insurance and Insure tech news, you may notice everyone is talking about Embedded Insurance. In fact, according to InsTech London, the market of embedded insurance could be worth $722billion by 2030.
Today, we are taking a closer look at this new insurance product:
What is embedded insurance?
Have you ever bought a mobile phone or booked an event ticket and, at the last step, coverage is included in your purchase? That’s embedded insurance.
As online purchases grow, innovative insurers are offering new products to help customers find the best coverage for their acquisitions. Embedded insurance is about offering consumers the opportunity to buy insurance while they’re making a purchase. What’s more, embedded insurance is about offering customized products at the most convenient time for the customer and in a user-friendly way.
You can add embedded insurance to a wide range of products and services. Here are more examples:
- Travel insurance when you are booking a flight
- Coverage when renting a car
- Cyber insurance for SMEs when buying a software
Benefits of embedded insurance
Now we understand better what embedded insurance consists of, let’s talk about the benefits for both, insurers and customers:
Customization. Thanks to Open Data and IA technologies, insurers can offer just the coverage the clients need for their purchases. Without spam. This increases customer happiness and, therefore, brand loyalty.
Seamless experience. With just a few clicks, customers get the right coverage for their purchases. They don’t need to look for it on different websites and make a separate purchase. This also implies time-saving and better customer satisfaction.
Reducing the protection gap. Some people don’t buy insurance until they already have a claim. Offering coverage at the moment of checkout in a user-friendly way makes it more accessible for customers. And that, for insurers, means reaching more clients.
Future of embedded insurance
Like any new business, embedded insurance presents challenges too. On one hand, not every insurance product can be embedded. They should be simple, short-term, and subscription-based.
On the other hand, insurance companies need the right technology and the right customer-centric approach to adopt it properly.
However, there is a big business opportunity there. In fact, 71% of British digital bank customers and 64% of traditional bank customers would be interested in receiving embedded insurance offers based on their transaction data.
Conclusion
Embedded insurance is about getting people what they need when they need it. Thanks to Open Data and AI technologies, insurers can provide highly customized coverage when the client is more open to buying it.
Insurers who are willing to invest some time and resources in technology today, will likely gather the rewards as the market grows.
At Wenalyze, we are experts on Open Data technologies for the insurance sector, that can help you to develop embedded insurance services. Please contact us to know more about our solution and how we can help you to increase your revenue.
