Turning embedded insurance into a vehicle for growth

Embedded insurance presents a double-edged opportunity. On the one hand, it can proliferate the channels through which insurtechs and insurance carriers can sell their products. On the other hand, it risks diluting a brand—and even potentially tarnishing insurtechs’ and carriers’ reputations if executed poorly. 

To mitigate risks and instead translate embedded insurance into a vector for success, business leaders should hold three variables front and center: 

Embedding is a spectrum

Embedded insurance ploys follow a general script. Accenture correctly defines embedded insurance as “any insurance that can be purchased within the commercial transaction of another product or service.” 

But that doesn’t mean the flows or visuals are all the same.

Some embedded products leverage a carrier’s brand recognition to connote trust. For example, Allianz, which is well known among consumers, brands its travel-insurance flows on flight booking websites to boost the likelihood that a user signs up for the product. But less-known carriers and insurtechs may instead highlight the terms and benefits of their insurance product, bypassing branding altogether. It’s up to the embedding player and its partner—as well their joint intentions—to determine how the embedding process is presented and engineered.

Partnering the right way

Choosing the right partners is key to ensuring that embedded insurance strategies are a success. For one, choosing the wrong partners may increase actuarial risk; embedded freight insurance carriers, for instance, might look into the resilience of partners’ supply chains and operations before tying up with them. 

Embedded insurance players may also want to look into partners’ users’ reviews on platforms like Trustpilot to gauge the potentially positive or negative impacts of being associated with a partner brand.

Quality control

Embedded insurance isn’t a one-and-done process. Carriers and insurtechs should complement their due-diligence at the outset of a tie-up with ongoing evaluation practices like quantitative analyses of a product’s success as well as qualitative feedback from users. 

A product’s terms may have to be tweaked to be more attractive or useful to customers, for example, or its servicing may have to be altered to better fit the industry it’s serving. Ultimately, the right confluence of partnerships, branding, product deployment, and servicing can turn embedded insurance into a vehicle for growth as well as brand development.