Embedded insurance is a type of insurance that is built into products or services. It can be used by insurers to provide coverage for customers in a variety of ways, such as through subscription services and loyalty programs. By having the ability to offer insurance coverage directly within the product or service itself, insurers are able to provide more comprehensive protection while also simplifying the process for policyholders. Embedded Insurance could account for over $700 Billion in Gross Written Premiums by 2030, or 25% of the total market worldwide.
This type of insurance offers a range of potential benefits to both insurers and policyholders, including reduced administrative costs, improved customer retention, increased customer satisfaction, greater access to data and analytics, lower risk of claims and fraud, greater convenience, improved coverage, reduced costs, and increased peace of mind.
What is Embedded Insurance?
Embedded insurance is a type of insurance policy that is bundled into a product or service that a consumer purchases. This type of insurance offers coverage without requiring the consumer to purchase a separate policy. For example, if you purchase a cell phone from a major manufacturer, you may also be offered an embedded insurance policy to cover any potential damage or loss to the device.
Embedded insurance policies are usually offered by the product or service provider, but can also be offered by third-party insurers. These policies can provide coverage for a wide range of events, including accidents, theft, natural disasters, and more. Depending on the policy, they can also provide additional benefits such as roadside assistance or travel protection.
Embedded Insurance Benefits for Insurers
Embedded insurance offers a range of potential benefits to insurers. These benefits include:
- Reduced administrative costs
Embedded insurance can help insurers save time and money by streamlining their processes, reducing the administrative burden associated with managing multiple policies for customers. Insurers no longer need to manually process customer information multiple times when handling different policies; instead, they can easily access all relevant data in one place without having to switch between applications or databases. This simplifies both customer onboarding and policy renewal processes, allowing them to quickly approve new coverage and renew existing ones.
- Improved customer retention
Insurers may find that their customers are more likely to stay with them when they offer embedded insurance as part of their product or service. This can help them build loyalty and increase customer satisfaction.
- Increased cross-selling opportunities
Embedded insurance can also help insurers increase their cross-selling opportunities. By offering customers multiple policies from one provider, they can easily add additional coverage to existing plans or package them together. This makes it easier for customers to get the protection they need and encourages them to purchase more insurance products.
- Greater access to data and analytics
Insurers can gain access to more customer data and analytics from embedded insurance policies, which can help them better understand their customers' needs and preferences. This can help them develop more targeted products and services that meet their customers' needs.
- Lower risk of claims and fraud
Embedded insurance policies may reduce the risk of claims and fraud because they are tied to a specific product or service, making it easier for insurers to track and monitor usage. This can help them reduce their overall risk exposure.
Embedded Insurance Benefits Policyholders
Embedded insurance also offers a range of potential benefits to policyholders. These benefits include:
- Greater convenience
Embedded insurance eliminates the need for policyholders to purchase separate insurance policies, saving time and effort. This can be especially beneficial for those who don't have the time or resources to research different policies.
- Improved coverage
Embedded insurance provides policyholders with additional coverage that they may not have been able to access through a traditional policy. This can give them peace of mind knowing that they have additional protection in case of an emergency.
- Reduced costs
Embedded insurance policies can often be less expensive than purchasing separate policies. This can help policyholders save money while still having access to quality coverage.
- Increased peace of mind
Policyholders may feel more secure knowing that they have additional coverage in place in case of an emergency. This can be especially beneficial for those who may not have been able to afford traditional policies.
Embedded insurance is perfect for you
In conclusion, embedded insurance has the potential to revolutionize the way that insurers and policyholders interact. It can provide a more streamlined experience for both parties, allowing them to work together in an efficient manner. By removing unnecessary paperwork and time-consuming processes, embedded insurance can help both insurers and policyholders save costs while also providing better customer service. Additionally, it may enable insurers to more effectively manage risk by analyzing real-time data from their customers’ activities.
Ultimately, with its wide range of potential benefits for both sides of the equation, embedded insurance could prove to be a valuable tool for creating positive change in the industry. Contact us at Inaza to see how we can help you launch embedded insurance products.