A recent survey sought to understand how customers of banks, digital banks, and other fintech apps would react to embedded insurance offers based on real-time transaction data. The survey of 504 Canadian bank customers was conducted by Momentive.ai (the research company of SurveyMonkey), and commissioned by Cover Genius. The question asked:

Suppose your bank, with your permission, monitored your transactions and offered a prompt for purchasing protection products based on your purchase history inside of your banking app. Please indicate how interested you would be in allowing them to make these offers.

The findings show that 67% of Canadian digital bank customers would be highly interested in receiving embedded insurance offers based on their transaction data, as would 57% of traditional bank customers. ‘Trust in banks to protect personal data’ is the primary driver for their interest, stated by 40%.

“The data show unequivocally that consumers are not aligned with government regulation prohibiting banks from offering embedded insurance in real time with financial transactions,” said Michael Fitzgibbon, Director of Insurance for Cover Genius Canada. “Canadians are indicating that current restrictions on bank-embedded insurance that would sit alongside mortgages and auto loans and the like are outdated in a highly digitized, post-pandemic economy where consumers increasingly appreciate the relevance and timeliness of embedded offers.”

Fitzgibbon, who is based in Toronto, recently joined Cover Genius to further bolster the global insurtech's activity in the Canadian market where he will oversee and manage partnerships, insurer engagement, and customer experience. With over 30 years experience in the insurance space, Fitzgibbon has held key executive leadership roles with regional and global insurance brokers and sees a great growth opportunity in Canada, coupled with disruption in the insurance industry. “Cover Genius has seen a significant increase in demand for embedded insurance offerings from their network of global partners - a growth that was intensified in the past 15 months due to the shift to conducting everything online. Canadian companies across a variety of business verticals are eager to embed truly personalized protection at checkout or sign-up or based on transaction feeds.”

The research mirrors surveys of 3,551 Americans commissioned by Cover Genius published last month, and 12 other countries, which similarly examined 14 life events or activities or major purchases that lead to insurance consideration, such as childbirth, purchases of car, property, pets and expensive items, contracting for a wage and becoming a lessee or landlord. Across the globe, the data points to significant demand for timely and relevant transaction-based insurance offers, with dramatically higher preferences if they’ve recently had major purchases or life events, or if they used a traditional insurer in the last 12 months, or if they purchased insurance from their bank. The authors note the significant gap between an insurtech approach and the “bancassurance” reality, where traditional banks partner with traditional insurers for offerings that are typically divorced from underlying activities.

The survey of Canadian customers also confirms that there’s broad support for bank-embedded offers for property insurance such as Renters, Homeowners and/or Landlords (39% of respondents are highly interested), auto insurance (28%), travel insurance (26%) and a range of warranties for high value personal and household items (38%).

The role and nature of traditional insurers as a “second step” in the buying process is also examined in the paper. Digital bankers and younger demographics are more likely to purchase insurance, however the data also points to a healthy future for banks as insurance distributors: 75% of Canadians who chose a traditional insurer or broker in the last 12 months would prefer bank-embedded offers for next time.

While recent experience purchasing insurance is one way to identify early adopters, another is identifying users of popular fintech apps. The breakthrough findings show that 72% of 114 customers who use mobile wallets, 91% of Instalment payment users, 69% of investment account/app users, and 84% of accounting software users are highly interested in receiving insurance offers. Interest is also high for small business operators (90%).

“This desire for a frictionless end-to-end experience has enabled Cover Genius to add partners like Intuit, Wayfair, Booking Holdings, eBay, Descartes ShipRush and gig economy and mobility companies”, Fitzgibbon adds. “Why limit the choice to traditional insurers when more than half of Canadians want their banks, fintechs and other financial service providers to tailor embedded insurance offerings for their needs?”

Download the full report, "The Embedded Insurance Report: A consumer-focused case for transaction-based offers from Banks, Neobanks and Fintechs", or the report for Canada.