Embedded insurance is far from a recent creation. For years people have been buying insurance alongside taking out their mobile phone contract or at the point of purchase of white goods in departments stores. But the drive by businesses in many industries to better meet often complex customer needs is helping boost the growth of embedded insurance, as too is the rise of analytics technologies that are able to deeply personalise the customer experience.
Representing a $3 trillion market opportunity, embedded insurance is big business and offers insurers, consumers and companies the ability to benefit in a variety of ways. Elements of traditional insurance products have failed to take into consideration the unique circumstances of customers looking for insurance.
When the option to purchase insurance is seamlessly incorporated into the product purchasing journey, needless hassle for the consumer is removed and the insurance gap can finally be bridged. According to Swiss Re AG’s research arm, the global insurance protection gap is around $1.2 trillion, with this figure rapidly increasing.
For insurers, partnering with tech firms and businesses to embed insurance products can unlock valuable new revenue streams and attract new customers. The advent of Open Finance is further enhancing the ability of insurers to tailor their services more closely to the exact risks facing consumers. If shared by a customer, insurers would be able to use personal data to offer the ideal insurance, at the perfect time, all within a trusted platform and at a price that fully reflects genuine risk.
‘By embedding our insurance solution into the Lyft marketplace, Buckle allows rideshare and delivery drivers to pay for their insurance as they’ve earned it. As well as being convenient, this allows gig workers to drive without the large one-off costs of buying annual insurance coverage’ Andrew Rear, Non-Executive Chairman, Buckle
Examples of context-based, insurance innovation are happening now. Last year, UK bank NatWest and cloud accounting software firm FreeAgent partnered with specialist insurer Hiscox to provide small business customers with personalised insurance quotations. Backed by a combination of financial data from FreeAgent and artificial intelligence technologies, the software hopes to identify businesses that could most benefit from insurance and create a tailored offer.
Travel insurance has been embedding within the financial and airline industries for some years, but now in the face of the pandemic we have seen hotels embedding travel medical coverage in room rates, and employer services organizations including it within their service offerings. Having flexibility for these scenarios and an API for easy deployment makes embedding possible’. Andrew Jernigan, CEO, Insured Nomads
As the embedded insurance ecosystem continues to evolve, many of the current smaller players can expect to scale rapidly. Platforms like Trōv Insurance Technology and Cover Genius are leading the way with high-profile partnerships with e-commerce giants that are showing how the future of this industry could look by creating real-life examples.
“One of the most fascinating parts of my job, as Chief Innovation Officer, is watching how lines become blurred. With the rise of platforms technology and APIs, financial services can be seamlessly embedded into software or applications for consumers or corporates. Whereas the role of – and services provided by – the bank used to be clearly defined, now they’re integrated into other user journeys so much that the boundaries are virtually invisible.” Shuki Licht, Chief Innovation Officer, Finastra
Instead of spending valuable time searching for insurance online and comparing quotes, this approach automates many of the previously manual processes in insurance and reduces the admin burden to insurance customers.
According to a survey commissioned by Cover Genius, an insurance technology company that works with online firms including Intuit, eBay, Skyscanner and Wayfair, customers are more than happy to purchase insurance from non-insurance businesses. Their report found that 60% of consumers would prefer to buy insurance from their favourite brands, with almost one-third saying they would buy more items online if insurance protection was offered.
‘More and more brands are looking to offer an end-to-end solution across the entire customer journey. This not only creates a frictionless experience, but also helps to instil brand loyalty. The insurance sector is no different. If insurance companies can provide their products alongside embedded payment and finance solutions in one integrated experience, they can increase conversion and build a deeper relationship with their customers.’ Tom Bentley, Chief Commercial Officer, Vodeno
Contextual analytics opens up a world of new capabilities and services for insurers to offer to clients through their partners. As the simplicity of embedded insurance attracts more and more major online businesses, consumers will gain an extremely efficient and streamlined insurance option.
FTT Embedded Finance & Super-Apps North America goes live on September 2 – 3 2025, register now to learn more about the future of embedded insurance.
Written by Finabarr Toesland, Editorial Contributor
