• Marat Nevretdinov, Managing Director at HDI Embedded


• 25.07.2023 10:30 am
#insurance

Embedded insurance is no longer a novel idea. Instead, it’s a growing force revolutionising the insurance industry tapping into the wider embedded finance trend, with a market opportunity of $3 trillion – the number that has already made most insurers claim their ambition in the embedded market niche. Described as the integration of insurance into products or services of third-party brands, embedded insurance enables businesses to offer tailored protection solutions for end customers. 

Regardless of the industry, business leaders are increasingly acknowledging the immense value that embedded insurance can bring to their operations. We are all familiar with examples that exist in the travel and automotive sectors, where rental car and flight bookings come with insurance options at the point of sale, that account for cancellations or delays. Market leaders like Amazon and Tesla have also acknowledged the benefits of embedded insurance and currently offer customers a range of hassle-free insurance solutions. With market projections pointing to continued growth and customer demand on the rise, embedded insurance is poised for significant expansion, presenting a prime opportunity to unlock its revenue-generating potential. 

Why is embedded insurance so important? 

By combining insurance know-how with technology, any business can weave insurance offerings into its infrastructure, products and online services through third-party platforms and APIs. Whether it’s a bank, retailer or online marketplace, embedded insurance can enhance a business’ product portfolio and deepen its customer value proposition.

In an increasingly competitive market populated by savvy consumers, embedded insurance enables companies to add a new dimension to customer engagement. Chiefly, it also opens up new revenue streams for its proponents. 

Adopting a flexible model to unlock growth

To build successful embedded solutions, businesses must adopt a flexible, digital-first model. The customer must remain king and the final objective should always be to provide seamless access to the most competitive solutions.

• Becoming customer-centric

While a customer sees a simple and easy add-on, embedded insurance consolidates multiple types of coverage into a single policy, removing the hassle of seeking different providers online. Aligning with these growing expectations of personalised experiences and offering easily purchasable insurance at the point of sale is a sure way to increase customer loyalty and retention, and offering the best competitive solution. 

• Seamless process 

Partners from virtually any industry can offer insurance policies as an add-on feature at the point of sale online - meeting customers where they are and at the right time. Companies must select the right insurance technology partner, one with the capability to plug and play solutions directly into their existing tech stacks - allowing for the easy surmounting of access barriers.  

• Continuously offering better services 

When done properly, embedded insurance solutions can keep customers within company ecosystems for longer. Customers purchasing insurance alongside digital products are encouraged to become repeat customers, and over time this means more data insights can be gathered to understand customer trends and buying habits. Armed with this data, businesses can continuously tailor and improve the online experiences of their customers.  

The win-win of embedded insurance

For businesses, embedded insurance offers new revenue streams and increased customer engagement opportunities. For insurers, it means more effectiveness via the ease of distribution and targeting the real insurance needs of consumers.

The benefits don’t stop there. Embedded insurance also helps the industry progress as a whole. It creates more distribution opportunities, greater sales channels, and better performance across the board. The emergence of embedded insurance has opened up a new model to effectively distribute insurance services and revolutionise the way businesses can interact with their customers and partner insurers. It's a win-win situation for all parties involved.