Embedded insurance offers relevant and personalized insurance to customers while they purchase a product or service. For example, they might be offered car insurance when renting a car or travel insurance when booking a flight. The concept began in the 1980s when banks allowed insurance companies to sell their products to customers via bank sales agents; banks earned more revenue, and insurance companies expanded their customer base. Today, digital embedded insurance eases the customers’ decision-making and helps insurers reach the right customers with the right coverage at the right time.
Sales
With embedded insurance, insurance companies reach more customers when and where it’s relevant for them, equaling more sales. In addition, as the sales deals are done via other platforms, the lower cost per sale cuts acquisition costs.
Data
Digital embedded insurance most often appears in online shopping, including everything from travel insurance when booking a flight to extended protections for a new phone. Insurers can use online shopping data to customize policies, perform real-time risk assessments, and price more accurately.
Proper protection
The protection gap is growing, i.e., the difference between total and insured losses. But making it easier for customers to buy coverage at the right time and place can narrow that gap. With embedded insurance, customers don’t have to go looking for coverage - it will find them. The additional benefit here? They may not even realize they need it until it’s offered.
A digital embedded insurance solution is integrated into a system through open application program interfaces (APIs), enabling insurance companies to embed their products virtually anywhere. This allows insurers to meet their customers wherever they are, whether that’s in a purchase flow, through an e-commerce platform, or embedded into an app.
For consumers.
With embedded insurance, consumers gain both better coverage and smoother experiences. Being able to secure insurance with just a few clicks on a mobile device offers consumers immediate peace of mind. It’s flexible and fast, providing today’s consumers with a service that fits their digital lifestyle.
For insurers.
Apart from embedded insurance being an effortless addition to the sales strategy, insurers will also benefit from the provided insurance data, enabling them to generate better products for their customers and strengthen their offers. It will also be a simple way of reaching new – and more – customers online.
For third-party providers.
Embedded insurance integrates innovative insurance products into the customers’ purchase journeys seamlessly, either as add-ons to current offerings or as new components. For third-party providers, it means a stronger value proposition for their customers which builds and strengthens both the brand and customer loyalty.
Embedded insurance is rapidly changing shape to keep up with the customers’ digital behavior. Want to learn more about how you can benefit from it? Contact us.