Bain & Co says that embedded insurance is becoming more widespread. This is where certain companies offer insurance at the point of sale. An example is Grab and Chubb partnering in Southeast Asia to offer accident coverage to all riders while booking a trip. Here, the insurer forfeits the customer relationship to the distributor.
In addition, Chubb has developed a set of application programming interfaces (APIs) that allow its partners to easily integrate Chubb’s insurance products into their platforms. For instance, DBS Bank used Chubb Studio to develop and deploy Mozzie Protect, an insurance against dengue fever.
According to Bain, insurtech companies providing these embedded services are attracting venture capital. These insurtechs provide services that allow any business to integrate insurance into its offerings and include names such as Extend, Element, Qover, Boost and Wrisk.
Big technology firms have also shown interest in embedded insurance. For instance, Apple offers AppleCare for purchases of MacBooks, iPhones and iPads. Amazon is partnering with Next Insurance to offer small business insurance to Amazon Business Prime members.
“The greatest penetration [in embedded insurance] will initially come, we believe, in three lines: auto (such as insurance embedded by automakers into the car sales process), travel (through insurance built into flight or hotel bookings), and property (including renters’ insurance),” Bain says.
Bain reckons that embedded insurance and capabilities as a service could reshape the industry by 2030. Certain insurers might seek to build scale in specific activities, such as customer acquisition or funding. US-based Lemonade Insurance started with property insurance and used it to expand to auto, pet health, and term life insurance.
By the same token, life insurance companies are going beyond their core offerings. Pulse by Prudential is a case in point (see main story) with its telemedicine, health, nutrition and lifestyle offerings. Ping An’s Good Doctor service has grown to become China’s largest telemedicine provider, with more than 72 million monthly active users. These types of direct service delivery will require a large scale and thus be practical options for only a few companies, Bain says.