Linked to the purchasing process
So-called “embedded insurance” is one of the big trends within this transformation process. In fact, a 2021 InsTech London report predicted that the global embedded insurance market will grow to $722 billion in gross written premiums (GWP) by 2030, more than six times its current size.
What does it entail? This type of insurance is usually linked to a product or service and is offered to the consumer as an optional add-on during the purchasing process. For example, when buying a cell phone, the customer is presented with the option of adding anti-theft insurance; when booking concert tickets, cancellation insurance is offered; or when purchasing a car, the dealer includes car insurance in the sale.
Embedded insurance has several advantages for customers and insurers. Firstly, convenience for the user: if a person buys a vacation package for extreme sports in a foreign country, they would have to contact different insurance companies to find one that would protect them in case of a mishap. In addition to the time spent in comparing the prices and cover from each of them, in all likelihood the cost of the trip would increase considerably. The idea behind embedded insurance is that the travel agency can include the insurance that best suits the customer’s particular needs.
In addition to making it easier and more convenient for the consumer, for insurers it means the ability to reach a wider audience and thereby increase business volume in a streamlined way.
Embedded insurance offers more affordable, relevant and personalized insurance for users, exactly when and where they need it most: that efficiency is possible thanks to new technologies like Artificial Intelligence, the Internet of Things, Machine Learning and Big Data.