The Benefits and Challenges of Embedded Insurance
Embedded insurance is predicted to grow more than six times by 2030, resulting in an estimated $722 billion in gross written premiums. But what exactly is embedded insurance, and what are the benefits to insurers and wholesalers? Keep reading for all the details.
Understanding Embedded Insurance
Embedded insurance is any insurance product that can be purchased within the commercial transaction of another product or service. For insurers and wholesalers, embedded insurance allows them to integrate add-on or ancillary coverages with other products and services in their existing operating systems as part of their core insurance offerings or as an additional benefit alongside other products.
Simply put, embedded insurance is a bundling of coverages presented directly to a customer at the point of sale, eliminating the need for them to shop elsewhere for insurance.
Here’s an example: A wholesale insurance company that sells property and casualty products adds a new payment capability on its website, making it easy for policyholders to pay their premiums online securely. The customer, who has a homeowners policy, accesses the payment portal and pays their bill. At that time, the system recognizes that the customer doesn’t have a personal liability umbrella policy, so it offers information about the coverage and, if requested, includes a pre-filled application and quote. Next, the customer can purchase the additional coverage if they desire.
In short, rather than shopping elsewhere for coverage or purchasing additional insurance as a standalone product, customers are given convenient access to additional products, coverages, policy forms, etc.—all within their current interactions.
Key Benefits of Embedded Insurance
For consumers, embedded insurance provides a convenient way to learn about insurance products and services based on their specific needs and purchase insurance from a company they already do business with and trust.
For insurers and wholesalers, embedded insurance technology provides:
- New and wide-ranging opportunities for reaching existing customers online
- An innovative way to grow their business by presenting customers with additional insurance products that are personalized to meet their individual needs
- The ability for customers to instantly purchase coverage without having to navigate separate insurance portals or applications
Embedded Insurance Challenges
Along with the benefits, there are certain technological challenges associated with embedded insurance that include:
- Operating platforms that can collaborate with various service providers
- The ability for systems to securely share relevant data to provide accurate coverage offerings
- Ensuring compliance with insurance regulations across different industries
The good news is that an embedded insurance solution can be easily integrated into any existing operating system through an open application programming interface (API). API insurtech is helping insurers and wholesalers offer more tailored insurance solutions across various platforms and services, making it more accessible and convenient for customers to purchase all the coverage they need from a company they know and trust.
Seamlessly integrating insurance products into existing commercial transactions enhances customer convenience and fosters trust through familiar channels. Insurers and wholesalers can capitalize on this trend to expand their reach and offer personalized, on-demand coverage – paving the way for a more streamlined, accessible, and customer-centric insurance landscape.
About Surefyre
Surefyre is a highly configurable insurance automation platform and agency portal focused on digital distribution and automated workflows. Our easy-to-implement process can integrate with almost any platform, from outdated legacy systems to top-of-the-line programs. Our codeless integration platform makes your life easier by automating the submission, rating, quoting, and binding process for all P&C insurance products.
To learn more, contact Blake Wallace, Account Executive, at bwallace@surefyre.co or 239-405-4337.
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