Embedded Insurance 2.0 – a Multi-Trillion dollar opportunity for brands
The insurance industry has long been ripe for disruption. Think of the last time you bought insurance: the amount of paperwork, the pages of difficult-to-understand terms, the uncertainty about what you are covered for, the ‘one-size fits all’ product with unaffordable pricing etc. Not to mention the difficulty with claim submissions and non-existent customer service. There is no doubt that a change is needed.
That change is being facilitated by embedded finance. Shifts in consumer behavior are driving this. Trends such as increased engagement on digital channels, increased online spending, receptiveness toward buying financial products from non-finance institutions, increased openness to buying sophisticated financial products online, and willingness to share personal data are all contributing to this shift. This movement provides a massive opportunity to embed insurance products – an opportunity predicted to exceed $3 Trillion by 2032, according to estimates by Simon Torrance.
Embedding insurance gives retailers and brands the opportunity to generate additional revenue streams, increase post-sales touchpoints with customers and gain a competitive advantage against competitors. It builds a risk solution into high-engagement digital distribution channels, at a time when consumers are most engaged; offering a product that is tailored to their specific needs based on contextual data gathered by the platform.
A simple example: Standard travel insurance offered by incumbents, tends to have a fixed price regardless of how often you travel or your cancellation history. Embedding insurance will mean your travel agent, Booking.com, or whichever platform you use to book your trip will offer you insurance based on your specific risk profile and needs. It will either be on a per-trip basis which comes at a cost tailored to where and how often you travel, how big your family is, and if you travel with your pet. This way, the insurance will be bundled into a hotel booking or offered as an add-on at checkout. Or the platform can offer a premium subscription model with exclusive discounts which cover you for all the trips you book, this way the insurance option will also be invisible and be most convenient for the consumer.
The opportunity for non-financial brands is clear, but the solution perhaps not as much. Therefore, aperture and Embedded Finance & Super App Strategies have teamed up to issue a report that will help decision-makers understand the embedded insurance landscape.
Launching in May, the “Embedded Insurance 2.0” report, reviews the embedded insurance market and, using digital age criteria, analyses over 50 vendors, who are best placed to aid brands to capitalize it. The report provides decision-makers looking to invest in and/or partner with embedded insurance providers with an overview of the landscape and the key factors to consider in their decision-making process.
To get early bird discount to the report, sign up here:
https://aperture.co/embedded-insurance-2022/
and visit us at FTT Embedded Finance & Super Apps in London on 26 April to find out more about the $5 Trillion embedded insurance market and how you can address it.
Written by Carla Venter, Head of Investments, Aperture
