Since the onset of the pandemic, many businesses across all industries stayed afloat by fundamentally understanding the way people shop and purchase and transforming their processes to meet that need. This holds true for the insurance industry as well. With customers using their
Having an innovative digital distribution model is one of the most important components for carriers to get ahead today. As more legacy businesses undergo
One of these channels of distribution gaining more traction is embedded insurance-as-a-service.
The popularity of EI is growing rapidly. Per Lightyear Capital, the U.S. market value of embedded insurance is expected to balloon from
Airbnb leveraged embedded insurance by launching host liability insurance this past year, which covers damages up to $1M.
As more insurers experiment with embedded insurance and find opportunities to partner with big brands like Tesla and Toyota, they must determine which applications they can integrate that will attract shoppers at the point of sale. More importantly, they need to determine where they can make the purchasing decision frictionless and easy for an insured to buy.
The key is to make the entire purchase easier and more holistic – buying car insurance and a warranty all at one time just makes sense. An easy buying process creates more value. Most importantly, there is often a lower loss ratio associated with embedded insurance. The insurer can get data or characteristics of a buyer of a product – like a Tesla – that would have a better loss ratio than a standard customer and therefore, can charge a lower price.
If insurers want to thrive in today’s competitive market, they must rethink the way their products and services have traditionally been distributed and look to alternative channels like embedded insurance. Customers expect seamless, easy and valuable purchase experiences and carriers need new ways to access these customers. It is just the first inning, and embedded insurance is just one step in the changing