Ecosystem partners offer insurers scale, but alignment is critical
Insurers are discovering that ecosystem partnerships offer much more than access to new customers. They can provide the technology and skills vital to scaling embedded cover across multiple platforms at speed.
Insurers are discovering that ecosystem partnerships offer much more than access to new customers. They can provide the technology and skills vital to scaling embedded cover across multiple platforms at speed.
But finding the right partner carries risks. Integration can be expensive, disrupt customer flows, and increase compliance complexity. And the challenge goes beyond technical compatibility. Business objectives, strategies, and customer profiles all need to be in aligned.
The opportunities and challenges of building ecosystem partnerships were a key focus of an online event hosted by the Qorus Embedded Insurance Community and Allianz Partners. The event, which examined the emergence of seamless protection in customer-centric digital ecosystems, featured speakers from Allianz Partners, Qover, Caser Seguros, Cathay Life Insurance, and Al Rajhi Takaful.
The biggest hurdle for insurers looking for ecosystem partnerships with banks and travel companies is aligning incentives and business models. That’s according to 55% of executives polled at the event. Next was managing regulatory and compliance complexity (23%), followed by integrating systems and data flows (15%), and ensuring a consistent customer experience (7%).
The benefits of successfully integrating embedded services into partner platforms are considerable. Half the executives polled during the online event see enhanced customer trust and loyalty as the biggest benefit of embedded travel protection, for example. They rank it ahead of greater protection accessibility and relevance (22%), driving conversion and revenue for partners (17%), and gathering richer customer insights and data (11%).
Integration management is critical
Partnerships give insurers the ability to extend their embedded services by tapping into other ecosystems but it’s critical that integrations are well managed, says Sara Pavan, global head of Allianz Partners’ Allyz digital ecosystem.
“When working with partners we ask whether we are able to provide our services or work together to achieve a win-win outcome without disrupting the customer experience or imposing our look and feel on the platform. We must be able to integrate our offerings deeply into the partner’s customer flow.
Allianz Partners uses its Allyz digital ecosystem to provide cover and assistance directly to its customers while also working with partners to integrate its offerings into their ecosystems. Those partnerships enable Allianz Partners to deliver embedded protection into touchpoints such as booking platforms, banking applications, and airline portals.
Gaining access to a partner’s customers is only the first step in an effective ecosystem collaboration. It’s essential that an embedded product is presented to potential clients at the right moment in the customer journey, says Hugo González Riera, chief officer for motor insurance at Spanish carrier Caser Seguros. That requires pinpoint positioning and timing.
“You have to be in the moment when the client is buying, the moment they’re deciding, and that’s not easy.”
Furthermore, the offer has to be especially appealing to the client in their particular circumstances. Attractive pricing is not sufficient on its own, says Riera.
Delivering embedded offerings at the right time and context requires ecosystem infrastructure that can scale across multiple markets and geographies. Belgian insurtech Qover operates in 32 countries and partners with risk carriers such as Chubb, Zurich, and Baloise as well as distributors like multinational neobank Revolut. It uses its infrastructure to embed insurance services, underwritten by risk carriers, in distributor ecosystems in the financial services, automotive, and retail industries.
Insurers are warming to partnerships
Quentin Colmant, CEO and co-founder of Qover, says traditional insurers are increasingly recognizing the importance of ecosystem partnerships.
“We are seeing a very strong change over the past five years. Insurers are realizing the pace of innovation is just too quick for them to build everything themselves and that they need a collaborative ecosystem.”
Colmant adds that Qover is being approached by a growing number of brokers and insurance companies looking for partners to help them expand into new markets or develop additional services.
Advances in artificial intelligence (AI) are enabling insurers to more effectively position and deliver embedded offers.
“The real value of AI is that it provides smart, personal assistance that builds client trust and peace of mind,”
says Faisal Almusallam, director general for claims at Al Rajhi Takaful in Saudi Arabia. Such assistance can be adapted to meet a client’s specific needs and circumstances.
“We can tailor each offer to match a customer’s lifestyle rather than offering one-size-fits-all insurance.”
Beyond personalization, AI is speeding up claims processing, improving fraud detection, and enhancing customer support.
Compliance is increasing partnership complexity
However, regulatory and compliance requirements are constraining some AI ecosystem applications. The European Union’s recent AI Act, for example, requires human oversight for high-risk AI decisions that may affect a person’s rights or financial status. Insurers could use AI to approve claims, for example, but any rejection of a claim would have to be reviewed and confirmed by a human employee.
Increasingly stringent data and AI regulations, combined with already extensive supervision in the insurance industry, add further complexity to ecosystem innovation and partnership collaboration.
To help financial services firms develop products that are both innovative and compliant, the government of Taiwan provides a regulatory sandbox that allows companies to test products in a controlled environment, says Jerry Lu, digital innovation manager at Cathay Life.
The collaboration revealed that customers want many other embedded services in addition to insurance when traveling, adds Lu.
“Instead of just focusing on embedded insurance, we look at the entire travel journey and collaborate with companies in other industries such as airlines, telecom firms and VIP lounge service providers. Through these collaborations we try to build a connected travel experience where the customer feels Cathay Life is always with them on their journey.”
Successful collaborations require partners to be aligned in three key areas, says Lu.
Digital capability: Strong online platform data systems and digital engagement tools enable partners to use API connections and real-time data sharing to integrate their ecosystems smoothly and enhance customer services.
Customer segmentation: A close customer segmentation match, aligning categories such as digital behavior and financial activity, allows both partners to strengthen their value proposition.
Partnership commitment: Long-term commitment, financial stability and a willingness to invest time and resources in the partnership are essential to ensure the enduring value of the collaboration.
Effective ecosystem partnerships provide insurers with the scale and capabilities to deliver embedded protection at the right moment and in the right context. To secure such partnerships, they need to align incentives, integrate thoroughly, and commit to long-term collaboration.
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