The embedded insurance market has been around for decades in low-tech, elementary forms. For example, purchasing auto insurance before driving off the dealership lot or homeowners insurance prior to closing escrow. Easing unexpected financial burdens by way of embedding insurance has been around for over 100 years.
What has changed is that it’s now shifted from analog to digital. Embedded insurance in the digital age is designed to seamlessly meet (and delight) the customer in their time of need with the right insurance product at the right time and with as little friction as possible.
While this new digital form of embedded insurance is still in its early stages, it’s expected to grow rapidly in the coming years. According to a report by Research and Markets, the global embedded insurance market is projected to grow from $5.8B in 2020 to $7.7B by 2025 – a compound annual growth rate of 5.9%.
With the rise of embedded insurance in industries such as e-commerce, travel, auto, home, and financial services, it’s clear that the potential for growth in this market is significant. As more companies look to integrate insurance into their product offerings, the embedded insurance market is sure to continue expanding and capturing substantial GWP and delivering consumers value.
When it comes to actually achieving embedded insurance, however, the path is not always straightforward. For companies looking to enhance the customer experience, here are the best ways to provide customers protection (and keep them protected) by using embedded insurance technology.
Meet customers in their moment of need
Whether it’s an insurance provider, an e-commerce retailer, or a large brand, the products or services they’re providing to customers are, understandably, the focus. And, if they’re really thinking of the customer, they’ll likely want to make the offer of insurance relevant and the process as seamless as possible.
The best way to do this is to be one step ahead of customer needs. They must be proactive in providing them with the best possible option. That means thinking about what fits within the primary offering. If they are buying a home, they need homeowners insurance. If they are buying a car, they need auto insurance. If they are getting a loan for a small business or establishing a new business, they will need business insurance. Are they shopping on an e-commerce site? They may want the benefit of return shipping protection. With embedded insurance technology, customer data can be used to digitally display an immediate quote so that the customer won’t have to do too much work on their end to make the best decision for how they want to protect their item or purchase.
Make insurance frictionless and fast
People want speed and convenience. According to a recent study, 40% of consumers will wait no more than three seconds for a page to render before abandoning the site. And, nearly 80% of online shoppers who experience a dissatisfying experience are less likely to purchase from that site again.
The right embedded technology solutions have APIs that allow for quick, real-time answers to otherwise lengthy questions. For instance, calculating car insurance payments was once a pretty time consuming process – both in-person and online. With the agility of certain integrations, this can now be done in seconds. This level of speed caters to customers in a way that was once impossible.
Real-time calculations are key to providing online shoppers with the speed of service they want. However, not all APIs are created equal. When you add up the results of what high-performing technology can achieve, the cost of implementing the right solutions are immaterial.
Identify the problem to solve
More often than not, insurance is a required purchase for consumers. They are mindful of where and how they’re spending their money. And, people can be pretty fickle about the brands they trust – especially if their online experience is less than stellar (see numbers above). In order to avoid losing customers, it helps to give consumers the sense that what they’re getting offered is the best option available.
Aligning capabilities is key to success when launching digital insurance products. The goal is to keep customers engaged, and one way to avoid them looking elsewhere is to offer them exactly what they need, at the exact right time, and with information displayed so they can make a buying decision.
Stay in your lane to nail execution
When it comes to developing a strategy for an insurance go-to-market plan, keep it simple. All parties need to do what they do best. It takes a village to launch an embedded insurance strategy. The best outcomes are achieved when all parties involved focus on their area of expertise and work together to accomplish objectives.
When brands focus on customer engagement and surfacing insurance offers, and the insurance carrier stays focused on the insurance product and regulatory concerns, and the tech platform stays focused on orchestrating and enabling the insurance transaction, the desired objectives can be achieved.
Without this technology orchestration, the pain is real. The industry has seen many programs that fail to deliver. Insurance is complicated and one must not be an expert digital partner to execute on an embedded strategy that provides value and satisfaction to the entire ecosystem.
It helps to not only have an insurance expert, but also a tech platform that serves as an advisor to the overall digital strategy. With the right platform partner, it’s possible to embed insurance offerings to customers and generate massive ROI with ease.