by Morten Kriek.
Embeddable Insurance: A Value Driver for Businesses
In today’s fast-paced business environment, customers demand on-demand services, personalized products, and simplified user experiences. Insurance, often perceived as a necessary evil, can evolve into a value-driven solution when integrated into businesses’ offerings.
The Rise of Embedded Insurance
Embedded insurance involves offering insurance as a service through providers like Fidamy, which handle complex insurance regulations and provide technology and expertise. This shift from traditional insurance models empowers businesses to focus on their core offerings while leveraging insurance to enhance customer loyalty, generate revenue, and win new customers.
Market Potential and Trends
The embedded insurance market is projected to reach $2.5 trillion by 2032, with half of this growth coming from new business opportunities created by technological advancements. European non-life insurance alone represents a $181 billion opportunity within the embedded space.
Strategic Opportunities for Banks
While traditional bank insurance offerings may decline slightly, innovative setups emerge. Orchestrators like Fidamy can provide technological capabilities, enabling banks to enhance their insurance offerings. This transition represents both a threat to traditional insurance models and a unique opportunity for banks to become trusted financial advisors, providing comprehensive insurance solutions.
Product Innovations and Data Leverage
Embedded insurance goes beyond distribution. It allows for the development of new, relevant insurance products tailored to specific customer needs. Data from banking transactions, location, and weather can be leveraged to provide personalized insurance propositions at the time of need.
Operations and Customer Experience
Optimizing insurance claims processes through data-driven insights enhances customer experience. Embedded insurance providers can streamline operations, reducing the time and effort required for claims, leading to faster payouts and improved customer satisfaction.
Partnership Considerations
Building an embedded insurance solution requires careful consideration. Options include building in-house, acquiring an existing business, partnering, or a combination of these approaches. Partnerships can provide stability and expertise, but finding the right fit is crucial.
Key Takeaways
- Insurance can be transformed from a necessary evil to a value driver.
- Embedded insurance offers numerous opportunities for revenue generation, customer loyalty, and satisfaction.
- Each business should evaluate the optimal approach based on its unique context.
- Partnerships with smaller entities can provide stability and diversification.
- The embedded insurance market is poised for significant growth in the coming years