Insurance

How in-vehicle insurance is transforming the insurance industry

Asia-Pacific is the largest integrated insurance market globally, with some of the biggest insurtech companies emerging from China and India. In fact, according to a recent survey by Momentive.ai, Indian banking customers ranked highest in terms of accepting integrated insurance offers, and “convenience” was the main driver of this interest.

Insurers are integrating technology into their operations to provide consumers with a hassle-free experience and provide insurance solutions tailored to their needs. Insurtech is the extra layer that provides enhanced customer comfort and value-added services. This distribution model not only provided a channel for additional insurance revenue, but it also pushed the insurtech game forward.

Through the implementation of Artificial Intelligence (AI), Internet of Things (IoT), big data analytics, open APIs and other technological breakthroughs, integrated insurance provides a sophisticated solution for customer complaints on one end of the spectrum while creating a frictionless experience on the other.

A win-win formula

By design, integrated insurance provides consumers with added value, a frictionless buying process where insurance is bought, not sold, and has an insurance value proposition that is easily accessible to consumers.

According to ResearchAndMarkets.com, the industry will gradually grow at a CAGR of 21.6% between 2022 and 2029. In addition, the integrated insurance industry in Asia Pacific is expected to grow 32.3% on a yearly basis to reach 24 $127.3 million in 2022.

As an insurance brand or carrier, integrated insurance solutions are a key strategy to stay competitive and provide a simple, value-added and high-quality customer experience. Factors that have accelerated the growth of integrated insurance in India into a positive industry are:

Load untapped markets: Integrated insurance allows insurers to access new markets that were previously closed to them. Many insurers are now able to provide microfinance companies with life insurance, personal accident insurance, etc., enabling them to reach the untapped rural market. Integrated insurance is a powerful instrument for insurers and third parties to extend the reach of the insurance industry in India’s underdeveloped markets, especially in rural and underserved areas.

Simplified integration: Insurance has long been considered a tedious process, from the purchase process, which requires filling out detailed application forms, all the way through to the claims process, which requires going through a series of steps in order to submit a claim. . Moving to embedded means simplifying things.

Embedded assurance leverages existing customer data that a customer has provided during the primary purchase journey. Existing data ensures that the coverage provided is complete, relevant and accessible at the click of a button. Integrated products are delivered to customers when they feel they need them most, rather than requiring long phone conversations and detailed application forms like insurance. The complaints procedure is also simple; there is no proof of purchase requirement as there is already a record of what was purchased and when. It establishes a painless and closed circuit insurance system.

Low customer acquisition costs: An insurance company typically spends about 20% of its revenue on advertising to new customers. Additionally, according to pre-pandemic research, 43% of senior insurance business decision makers believed their current data sources were inadequate for leads and programs that would create maximum profit potential.

Integrated insurance cultivates multi-line policyholders and reduces churn by engaging policyholders at the exact right point in their journey. Additionally, because integrated insurance acquires customers through an established channel for a parent product, the effective cost of customer acquisition is significantly lower. Direct-to-consumer insurers have the lowest costs due to lower commissions and more efficient cost structures, allowing them to spend more on advertising than their competitors, and therefore generate faster growth.

Improved customer experience: One of the most important benefits of integrated insurance is that it increases customer satisfaction. Insurers now have the ability to market their products and services directly to the people who need them. Insurance companies that have previously been outside the insurance business have an opportunity to deliver this offering today and increase the value proposition for the customer. We’ve seen a slew of products like eyewear, sporting goods, and even jewelry up for grabs when it comes to the built-in insurance benefit.

Integrated insurance provides more personalized coverage. This allows customers’ plans and premiums to be tailored to their specific needs. With built-in assurance, customers get precisely what they want. Since the insurance policy is tailored to the needs of the buyers, they get the greatest benefit and value.

Innovative product offerings: In-vehicle insurance players can build personalized, more relevant, and better-priced insurance policies using consumer data that was previously not recorded or, if captured, not digitized in an insurance offering. insurance on paper. They can also modify the features and cost of these plans, as well as discontinue them if they are no longer feasible.

Insurance penetration in India: Insurance coverages that can be added to taxi rides, bicycles, cleaning services, mosquito diseases, COVID, pets and other services have increased. The majority of them did not even exist in India a few years ago. Life insurance, for example, can be purchased through payment apps for as little as Rs 100 per year. Through a streamlined issuance procedure, the built-in insurance not only contextualized product construction, but also made insurance inexpensive and simple. As a result, insurance penetration surged in the country, which had been stagnating for more than two decades. This paradigm has provided a host of new opportunities for insurers to create, penetrate and target categories of insurance they have never entered before.

Embedded insurance is just getting started, but it has the potential to become a trillion dollar business. It has grown from simple gadget and product warranty coverage markets to more comprehensive car insurance coverages, and is expected to expand to other business areas if data privacy issues are resolved. Insurers should study their markets and assess how they can collaborate with insurtech to provide more efficient goods and services.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)