As you know, the potential of embedded insurance is exponential. In fact, many sources are calling it a $3 trillion market opportunity.
To capitalize, insurers will be required to do business in new ways … which begs the question … Is your core system nimble enough to support your embedded insurance strategy?
Embedded Insurance: An Evolving Business Model
Embedded insurance is all about providing consumers with built-in coverage for the items they purchase – from vehicles to appliances and electronics. While this is similar to a warranty product, the key difference now is that the insurance and product technologies are integrated, according to MunichRE.
Fueled by the promise of fusing insurance functionality with technology, embedded insurance simplifies processes and integrates risk mitigation into the single and seamless customer journey.
For insurers, there are many advantages. From a marketing perspective, insurers ride on the coattails of their product partners. If insurance is automatically included with consumer products, it is truly bought, not sold – thereby reducing both the cost of insurance distribution and the cost of underwriting.
Yet, there are countless unanswered questions related to servicing embedded policies. There are also many potential configurations for the product/insurance bundle. Products with embedded insurance may have different terms of engagement. For example:
- How will policy terms and conditions be communicated?
- How will insured data be collected at point of sale?
- Who manages the claims?
- How long does embedded coverage last – for the life of the product, or for one year?
- What happens to the insurance if the item with embedded insurance is sold?
- How are coverage renewals managed?
The options for embedded insurance are endless, but one thing is clear: Your ability to capitalize on the embedded insurance potential is only as strong as your core system.
The key to being a desirable embedded insurance partner lies in your ability to enhance the purchase experience with lightning-fast APIs, a delightful customer experience, and cost-efficient operations for your business partners.
Likewise, if you’re embedding insurance with multiple product partners, you’ll need multiple APIs and adaptable processes. You’ll also need to continuously improve your architecture and analytics.
How Insuresoft Stacks Up
Insuresoft leverages an API-driven ecosystem and more than 100 pre-integrations. This illustrates our ability to go wherever the embedded road may lead.
And as your embedded insurance strategy changes over time, our low-code/no-code platform provides the convenience to allow insurers to change underwriting rules, rates, and processes. Combined with our ecosystem, insurers can stay on top of the market and meet their consumer’s needs.