7 Key Reasons Why Embedded Insurance Should Be a Priority For Insurance Companies
Insurance is a complicated and cumbersome process. To enhance the customer experience without overwhelming consumers with critical terms and legal necessities, insurance companies are coming up with embedded insurance solutions. It has become so popular that it is expected to grow more than six times by 2030. Integrating embedded insurance along with the original product or service is one of the best insurance software solutions.
Embedded Insurance is one such insurance software solution that leverages these digital advancements to seamlessly integrate insurance into everyday services and products.
But before we go ahead with the relevance of embedded insurance in the industry, let’s find out what embedded insurance actually is.
What Is Embedded Insurance?
In simple terms, embedded insurance works as an add-on risk protection insurance, which is integrated into a customer’s purchase. For example, if you book a cab through an app, you are offered the option to purchase travel insurance or medical insurance as an add-on at the time of purchase. It is called Embedded Insurance. Once it is integrated into the purchase of products or services, instead of buying insurance separately, customers can purchase it as an add-on at the same time.
This way, insurers can distribute their services across multiple verticals and make them more accessible to customers.
Benefits of Embedded Solution
Embedded insurance is affordable, relevant, and customized. Compared to traditional insurance policies, it is less complicated and is easy to purchase. Due to its seamless purchasing option, it is beneficial for both consumers and insurers. Hence, it has become significant for insurers to integrate it across multiple channels, including flight booking apps, cab booking apps, and more.
Enhance Customer Experience
Through seamless integration of embedded insurance into various channels and platforms, makes it easier for the customers to make fast decisions. Most of the time, the terms of these policies are very simple and align with the original product the customer is buying. When a customer finds out that the original product they are purchasing is protected, they prefer to get it.
Expand Market Reach Through Strategic Partnerships
Insurance companies can easily widen their market reach through strategic partnerships with multiple businesses. For example, insurers can provide device protection with a purchase of a laptop or mobile by partnering with the laptop or mobile company or the retailer. This way, insurers can expand their market.
Flexibility and Personalization
Today’s customers prefer a more personalized service with scopes for flexibility. Insurers can easily create experiences tailored to their customer’s unique needs with embedded insurance. By leveraging technology, insurers can customize the insurance policy and add more features for the customers. This way, customers can adjust the policy according to their needs.
Increase Customer Engagement
For insurers, embedded insurance opens up new opportunities through customer engagement and loyalty. By integrating embedded insurance as an add-on, business adds value to their products and services, which leads to enhanced customer engagement. Moreover, it allows insurance companies to partner with big brands with a broader reach. For example, insurance companies can partner with multiple flight booking apps and get access to their massive customer base.
It Bridges The Protection Gap
Buying a one-off insurance policy can be cumbersome and complicated for consumers. Instead, providing embedded insurance can prove to be a game-changer. It is an opportunity for insurance companies to identify the difference in the amount of insurance customers could purchase and the insurance purchased. Insurance software solutions can bridge this gap.
Reduces the Cost of Acquiring New Customers
With Embedded Insurance solutions, insurance companies no longer need to reach out to customers individually. They have access to the partner channel’s customer base. Insurers can tie up with multiple industries and acquire customers without investing a huge budget in sales and marketing. This embedded solution not only reduces the premium for customers but also improves the margins for insurance companies.
Simplify The Claim Process
Generally, the policies, terms and conditions associated with embedded insurance are straightforward with fewer complications, which simplifies the claim process for the customers. Moreover, smart contracts with embedded insurance automatically verify and settle claims.
Final Takeaway
In the cut-throat market, insurance companies need viable solutions to acquire new customers while ensuring a better customer experience. Embedded Insurance is one such insurance software solution that enables insurers to expand their market through strategic partnerships. While the future of insurance companies lies in the smooth integration of such digital modules, it is important for insurers to verify if the products and services provided by the partner companies align with the insurance policy.
