The rise of embedded insurance offers insurers plenty of opportunities to drive up revenues but it also threatens to overturn many traditional distribution channels. Insurers need to embrace eight important trends to capitalize on this critical shift in the insurance sector.
The digital revolution that’s sweeping the globe is opening a myriad of opportunities for insurers to boost revenues by delivering innovative services to their customers.
Embedded insurance is at the forefront of those opportunities. Revenues from insurance offerings embedded in third-party digital products could reach as much as US$3 trillion by 2030, according to Forrester Research. Embedded sales of property and casualty (P&C) insurance alone could total US$700 billion by then, adds Deloitte.
Embedded insurance is both an opportunity and a threat for industry incumbents. It offers them a welcome stream of fresh revenues to offset tepid growth in their traditional markets. But it will also overturn many of their established distribution channels. Deloitte estimates that as much as US$50 billion in premiums could shift away from such channels if just 20% of US personal auto market cover switches to embedded insurance by 2030.
For insurtech start-ups, big tech platforms and other newcomers, embedded insurance provides an ideal vehicle to edge their way into the insurance sector. But it’s a vehicle that’s likely to attract considerable attention from regulators and competitors. Furthermore, Forrester Research warns that half the providers of embedded insurance will likely struggle to convert consumer interest into sales.
How then can companies in the insurance industry best capitalize on the rise of embedded insurance?
Leaders from across the insurance industry identified eight trends that companies should embrace to ensure they seize the potential of embedded insurance. The industry leaders were speaking at an online event hosted by Qorus’ new Embedded Insurance Community and Allianz Partners.
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