Shaping the future of embedded insurance through digital ecosystems and partnerships

It's still largely true today that buying a car is a better experience than buying the insurance for the vehicle. Let’s be clear about this, insurance is never going to compete with the thrill of taking a new car for a drive. But consumer demand for more convenient access to insurance is undeniable. That's what embedding an insurance product into a customer journey at the point of sale should be about - combining the experience of buying a new car with the insurance purchase.

More customers expect seamless customer journeys and fulfilling experiences; and the pressure is building for our industry to adapt, even more so with the accelerated digitalisation push caused by the COVID pandemic. Embedded insurance meets the growing customer expectations and is part of the solutions we provide to our partners. Swiss Re's iptiQ is a digital insurance company, powering partners around the world to drive their business growth and customer value, with innovative insurance solutions and a contemporary end-to-end digital platform. Working with our partners, we're improving accessibility to insurance products and ultimately closing insurance protection gaps for consumers.

An example of our customer centric approach is the embedded affordable household contents and private liability insurance product, Hemsäker, which we created for IKEA. With Hemsäker, furnishing a home can go hand-in-hand with buying home insurance. A fully digital journey means customers can get a quote and buy coverage in a few, easy steps. The product is currently available to IKEA clients in Switzerland, Singapore, Malaysia and Mexico, with plans for it to be offered in other countries as well. This case study highlights how digital ecosystems in insurance are critical in delivering scalable, easy to distribute and easy to access embedded insurance products. 

Driving value creation for our partners

For our partners, our solutions offer significant cost savings, sophisticated underwriting and great user experiences, resulting in better customer engagement. We enable insurers and intermediaries to transition from a traditional distribution model to a digital approach by providing them with data-driven insights and digital tools, so they can launch new products and access new markets quicker and more efficiently.

Our holistic insurance solutions are also suited to banks and retailers, giving them the opportunity to generate incremental revenue for their core businesses, while driving brand and consumer loyalty.  With more than 50 live partnerships across 10 countries in Europe, the US, and Australia, we're making insurance more accessible, and the customer journey a seamless experience. That’s the main idea behind our approach.

For ImmoScout24 we integrated a loss of rent insurance into their digital ecosystem. The online real estate platform was looking for an insurance solution, after research showed that 65% of landlords faced payment issues from tenants. With just a few clicks, landlords can add the insurance cover which reimburses them for loss of rental income in the early stages of a tenancy agreement. Coverage can be managed online and cancelled at any time by the policy holder.

Seamless collaboration with partners

Embedded insurance goes beyond integration at the point of sale. The customer experience should be at the forefront of every step in the value-chain. To achieve a single view of the customer, there is no room for friction between technologies, systems and partners in digital ecosystems in insurance.

Close collaboration and alignment with our partners is key. Our platforms have a modularised Application Programming Interface (API) architecture which minimises integration efforts for our partners. Our UX experts and behavioural economists work with partners to create customer-centric propositions, based around their customers’ needs and their business objectives. To fully tailor insurance products and service components, customer data and behavioural analytics are merged to align with customer buying behaviours and service expectations.

Getting closer to the customer

Embedded solutions provide data which help insurers to understand customers’ behaviours better. This data means we can make better underwriting decisions while making insurance products, and related risk prevention services, more accessible to customers.

Embedded digital journeys have other benefits too. Their inherent flexibility enables insurers to offer more choices to customers. A car insurance proposition that we created for the German insurance agent Getsafe has several unique benefits: a more streamlined application process; a no-claims bonus voucher, which replaces the traditional bonus malus system; and a sharing economy feature which allows multiple drivers to be added at no additional cost.

While customer demand clearly exists, the advancement has yet to be delivered by insurers and industry partners, alike. In 2020, embedded insurance sales accounted for only 6% of all global distribution channels and we expect embedded insurance sales to double by 2030.

Collaboration for customer benefit

In addition, I believe that the opportunities for digital insurance go beyond embedded insurance in the direction of platform business, with integrated digital marketplaces between insurance carriers, distributors and the end consumers, like Amazon and Uber have proven.

Platforms will allow insurance carriers around the world to join data-rich customer ecosystems with supply and distribution partners from outside the insurance industry. One example is Swiss Re's JV partnership with Daimler, called Movinx, with the aim of developing fully digital car and mobility insurance products.

It means that the future is more about collaboration between companies, between incumbents and start-ups. For digital insurance, this creates opportunities to lower distribution costs for more customers, and to close the insurance protection gaps. In addition, access to better data can improve products and reduce underwriting risks. By joining forces with partners to build a seamless and embedded experiences, we will create the greatest customer benefit.