Embedded insurance and is a $700B opportunity according to AnalyticsWeek and Morningstar Data
It’s a field that every Insurance professional should be thinking about
What is embedded Insurance
Embedded insurance is where the third parties are able to include insurance into their customer journeys and propositions, often at the point of sale.
Think Klarna for Insurance, Tesla’s Insurance offer, or warranty backed products with insurance baked in.
By integrating insurance at the point of sale or supply insurance becomes part of the partners product or service and adds value to their proposition. For the carrier this is a cost effective (or cost limited) distribution option and a route into new markets.
We believe that insurance solutions can be embedded into everything businesses do and businesses that integrate insurance early on are likely to gain a competitive advantage to both parties.
Ecosystems provide the foundation for embedded insurance
Identifying and working with 3rd parties to include Insurance can represent a shift in priorities in an industry that traditionally sells direct or via a distribution model of brokers, agencies and partners.
Successful embedded partnerships require thinking about the moments when the value added can be communicated as part of a wider digital experience. It requires thinking about customer needs and the ecosystem requirements, understanding and aligning with their brand values to build trust. This mindset is different from the current environment where customers use the current channels of DTC, brokers, MGAs insurers etc. often separately from the purchase they are making and as a distinct, conscious decision.
This has the potential to move insurance from something that is sold, to something that is bought.
Psychology plays its part in the sale
Including the insurance at point of sale makes it easier for customers to buy insurance as they are in the right mental and emotional place to see the benefits, and are in the mood to buy.
The industry has done this with great success in the offline world with leaflets at point of sale and with branded affinity programs but often the activation has always lagged as the customer motivations fade with even a short delay between purchase and insurance.
Embedding into a digital experience at point of sale offers a better experience, aligns motivations and can increase take-up. This is where we get our mantra of “making insurance easier to buy” from.
Adapting your digital distribution strategy to include Embedded.
Much of digital distribution relies on digital marketing to drive traffic and conversions, with embedded the strategy has to be about making your offer attractive to the 3rd party. This has some different drivers.
Retailers are obsessed with their customers’ journeys and are constantly testing, refining and optimising them, any insurance component needs to be as flexible as possible to support his. Providers need to be able to seamlessly integrate into these 3rd party platforms and services at the point of sale, not as a jarring customer experience or as an afterthought.
This also highlights the need to enrich data at the point of sale, to reduce the need for the customer to enter anything other than the bare minimum.
Digital distribution offers better customer experiences and aligns motivations.
We believe that Insurforce offers some of the most flexible APIs in the industry which can empower you to integrate with any 3rd party to offer insurance. The flexibility to offer complete control of the user experience (front-end) to collect the policyholder and risk information to your clients leads to seamless integration of your insurance product/service.