Embedded insurance is a bundled up coverage or protection within the purchase of a product, service or a platform. This means insurance is not directly sold to the customer but provided as an additional benefit.
With little to no physical interaction during the pandemic, most businesses migrated to digital spaces to help them sell their products and services. The insurance industry was not an exception. Insurance players had to move their sales, policy management and claims management processes into the digital space too. Insurtech startups took advantage of the available niche and built more insurance management and distribution platforms. With an increase in insurance distribution channels, embedded insurance-as-a-service has gained more traction within startups.
Insurtech startups are partnering and integrating with other startups and insurers to offer insurance products as add-ons. By embedding insurance in products and platforms with large customers bases, insurers are able to provide the right insurance products to their customers at the point of sale or at the appropriate time. Embedded insurance is majorly going to present itself during purchasing or booking, such that when one books a flight on a website they have an option to add on travel insurance for that specific period. Or, when one buys a phone from a website or an app, they have an option to add a cover incase of a damage or a loss.
One example is Kakbima; an insurance management and distribution platform, has partnered with Jungopharm; a pharma and healthcare platform for buyers and sellers of pharmaceutical and healthcare products, to offer on demand health and property insurance through its partner insurers. In this case Kakbima provides access and analysis of all the relevant available insurance products information, while Jungopharm supplies all their uninsured customers with information on the different products available. Insurers/underwriters then ensures all the uninsured customers are insured. All of this takes place in a way that is largely invisible to the end user.
If insurers have to thrive in today’s competitive market, they must maximize embedded insurance-as-a-service. This is a better way for them to access more customers and offer affordable, relevant and personalized insurance products and services. With embedded insurance, we are able to rebuild consumer trust and confidence in the insurance industry while closing in on all the protection gaps that are available in the market.
