Embedded insurance as a model for success: How additional insurance is becoming an integral part of the customer experience.

Embedded insurance as a model for success: How additional insurance is becoming an integral part of the customer experience.

Embedded Insurance: Successful business model with great potential

The third-party insurance sales strategy is nothing new, but the embedded insurance approach has evolved significantly in recent years and is proving to be extremely successful. Embedded insurance refers to insurance policies that are seamlessly integrated into a company's customer journey and thus expand the offering. Insurance is no longer viewed as a separate product area, but rather is an integral part of other services or a product purchase. Sales and customer contact are usually carried out by the seller, while the insurer acts in the background as a risk carrier or in the event of a claim.

The acceptance and relevance of embedded insurance has steadily increased in recent years. A survey by Hepster shows that two-thirds of participants have warmed to additional insurance in the last two years, with 53 percent having already taken out such insurance. Additional insurance for smartphones and laptops is particularly popular. As soon as the purchase price of a product exceeds 500 euros, more than half of consumers consider insurance to be important. These numbers show the enormous potential of the embedded insurance market.

Analysts predict annual growth of a good 19 percent for the integrated insurance market until 2029. Revenues from embedded insurance will increase from $10.78 billion in 2022 to $28.53 billion in 2029. The United Kingdom, Germany and France are particularly contributing to this growth. Experts see embedded insurance as the distribution channel of the future and estimate that it will achieve a global market share of 15 to 27 percent by 2032.

Success factors for embedded insurance are close cooperation with brands and providers, scalable and modular systems, an appropriately structured insurance product landscape and secure and seamless data transfer between customers, platforms and systems. Companies that successfully use embedded insurance not only expand their range of services, but also open up new business areas such as circular economy and new mobility.

The embedded insurance market has already brought about fundamental changes in the insurance industry and has become an integral part of the customer experience. Growth opportunities exist primarily in the areas of circular economy and new mobility. It remains to be seen how this market will develop in the coming years.

According to a report from www.cash-online.de