Embedded insurance has brought about a revolution in the insurance industry. Apart from making insurance affordable and accessible, it has also made insurance distribution more uniform and relevant.
Moreover, with it, people now don’t need to buy a one-size-fits-all policy, as they get personalized policies right when they require them. But they aren’t just the customers who are enjoying the embedded insurance policies, even the insurers are relishing many benefits of this latest technology.
But before we move on to the benefits of embedded insurance for the insurers, let us throw some light on what is embedded insurance.
What is embedded insurance?
An embedded insurance model constitutes insurance coverage with the purchase of any product or service. In simple terms, it is insurance coverage you get when you buy a product or service. Mostly, the insurance is built into the price.
Embedded insurance makes getting insurance a cakewalk. It makes coverage more affordable and accessible to those who need insurance coverage and even those who did not even know that they need insurance to cover the product.
This incorporation of technology into insurance allows any third-party service to integrate their product with insurance products to enhance customer experience. Embedded insurance can be provided as an independent product or as an add-on to the main product.
While customers enjoy numerous benefits of embedded insurance, it is also proving to be beneficial for insurers. Listed below are the main advantages of embedded insurance for insurers. Take a look.
It helps in closing the protection gap
Embedded insurance is the biggest reason behind the shirking of the protection gap. The protection gap, which is the difference between insured and insured losses, with its growth is the biggest concern of the insurance industry.
As embedded insurance integrates within the process of sales, it enables the customers to buy the insurance coverage right when they need it. This approach has managed to close the protection gap and enhance coverage.
It helps insurers get better opportunities
With the growing numbers of potential insurance users, insurance companies are under constant pressure to reach as many customers as possible. While it is not possible with the traditional insurance means, embedded insurance makes it possible for the insurers to serve the best policy on their tables.
The most modern insurance companies often use multiple APIs to foster connection between different elements like billing, customer management, claims, etc., allowing different insurers to cater to their consumers and offer them an unsurpassable customer experience.
It exposes the real risks in the system
The process of online shopping makes the personal data of customers vulnerable. Everything, from the browsing history to recent transactions, all the details are jeopardized.
Embedded insurance allows insurers to create customized policies. It allows the insurers to figure out whether or not the provided information is accurate, relevant, and updated in real-time.
It helps the insurers differentiate between assumptions and real risks.
It enhances the customer experience
One of the biggest advantages of embedded insurance is that it enhances the customer experience. A unique shopping experience is created by linking two independent systems with an application programming interface (API). The insurers get an opportunity to proffer their policies and services directly to the people who need them.
The bottom line
Embedded insurance is the future of the insurance industry. From customers to stakeholders, everyone is going to relish the benefits of this advanced technology for years to come. While insurers already have their hands full, embedded insurance is further helping them thrive in the competitive B2B2C environment.
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