"The embedded insurance model bundles coverage or protections within the purchase of a product, service, or platform. That means the insurance product is not sold to the customer ad hoc, but is instead provided as a native feature. So your car share membership comes with mobility insurance included, your new camera is covered for theft and damage right out of the box, and the platform you use to run your small business is bundled with professional liability coverage. Embedded insurance is transforming the insurance distribution model, providing insurers and their customers with a seemingly limitless number of unique and niche value propositions offered in real-time or at point of sale."
Sybille Fischer Baloise Group Jan 6th 2020
Compared with the bulk of insurance policies bought and renewed embedded insurance is and will remain a small part. But it will grow e.g. New Minis sold with 3 months’ insurance in Wrisk partnership
As the insurance purchase becomes ever more hidden and simpler embedded insurance policy holders will expect as fast, simple and satisfying an experience when it comes to claims. No going back to the clunky experience a direct consequence of aged legacy core systems or inflexible modern platforms.
At the same time road traffic accident claims, Personal Injury complications, repair network management and estimating cost and time to repair are the opposite of a simple embedded insurance quote. Claims management systems must tackle a wide spectrum of processes and workflows (some very complex) successfully to deliver an optimal result for policy holders, supply chain partners and the insurer. Get it right and you gain a distinct competitive advantage.
This will impact traditional sales, distribution and claims management service levels from carriers. A delightful experience for a BMW Mini owner will need to be equalled, even exceeded, for an expensive BMW auto policy holder.
Carriers and Brokers which aim to be in the top quintile will have to have an overarching strategy for both embedded and traditional insurance across all categories. And claims management platforms that can deliver the same customer satisfaction and NPS across all products and perils embedded or not.
It is questionable whether the modern large claims platforms can deliver that agility, robustness and innovative leaps to anticipate disruption. Yet do do they must without costing $10's of millions and taking ages to plan, implement and deploy.
The No Code-Low Code revolutions has changed that today. We live in a digital, minimal friction, high expectation world. Most insurers offer clunky, outmoded legacy interactions into this world and show surprise when customers respond badly.
Insurers should demand claims management products that can morph claims management from that clunky experience to exceed the high expectations of customers as and when they make claims.
Will you be trapped in today's claims pupa or fly like an agile butterfly into a truly digitally transformed customer experience service?
As economies, technologies, and market dynamics continue to evolve, an incredible opportunity has emerged for insurers – one that promises to turn that old maxim forever on its ear and revolutionize the way insurance is bought and sold. Enter embedded insurance.
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