Since the beginning of the new decade, and the growing digitalization of our daily lives are dramatically altering the way customers buy anything, including insurance. Traditionally the onus of insuring any product service would lie on the consumer after the purchase. However, the element of risk is at the top of everyone’s mind only during the purchase, and it gradually reduces thereafter. This is where the bundled insurance products come in.
The InsureTech giants have integrated the protection of the product/service as a bundle inside a product or service which is offered at the point of sale or service. This helps the customer cover the risk without any additional paperwork an d hence eases the entire sales process. Thus, Fintechs have enhanced the entire customer experience by integrating the insurance with the product, rather than keeping it for an after-thought. As a result, they lean towards embedded insurance policies.
Modern technology has created new routes for getting insurance coverage in the backdrop of key life events and purchase patterns. The proliferation of COVID-19 and the countrywide lockdown has only expedited the emergence and use of such technology. Let's take a deeper dive into the advantages offered by embedded insurance to the Fintech industry as a whole.
Why is Embedded Insurance so significant for Fintechs?
Following the COVID epidemic, a growing number of customers have switched to purchasing services and products from the internet, and insurance coverage is no exception. The technological support was ready a long time ago; however, the digitalization of the industry has created demand as well as people are more open to accepting technology now than before!
At the time of a monetary transaction, if insurance is provided to cover the risk at a nominal cost, with pre-filled information, it usually appears as an add-on and is easily purchased. This helps to increase insurance penetration as well as generate fresh revenue with additional protection to the consumer. This provides a low-cost marketing channel for insurance plans.
It also gives insurance providers access to a larger client base and their important information, allowing them to improve overall product development, undertake risk evaluation, and compute more precise premiums. It gives individuals a lot of ease because insurance is offered at the exact moment they purchase a valuable good or service.
When such efficiency is backed up by information and analytics to ensure that the client receives the correct insurance coverage for what he's purchasing based on the consumer's digital trail, it's an appealing offer for all parties involved. Fintechs, in particular, benefit from enhanced consumer data as well as client loyalty, so Embedded Insurance is really huge for them.
The most common examples of prevalent embedded insurance in India is a card protection plan for fraudulent transactions, protection plans for travel, etc.
Advantages of Deploying Embedded Insurance by Fintechs
Today, embedded insurance is more important than ever before, as the "coverage gap" - the difference between the quantity of insurance coverage that is financially and culturally advantageous for people, families, and businesses and the quantity of insurance coverage actually purchased – widens.
This is the basic flaw in the insurance sector's economic structure. Embedded insurance aims to fill this “gap” with low-cost distribution enabled with technology to provide personalized coverage to consumers, exactly WHEN they need it! The market capitalization of Embedded Insurance is expected to be 3 trillion USD which is many inches towards the closure of the “coverage gap”.
Today's consumers are more brand-aware and Fintech-savvy than ever before. They want their favourite companies to stay up as our environment moves from offline to online. Customers are increasingly thriving in the online environment — from e-shopping to e-banking — which resulted in an overflow of client data that is altering how companies give value to their daily activities. In this digital era, embedded insurance enables businesses to grow more customer-centric with personalized services instead of “one-size-fits-all”.
What makes TurtleFin’s One API the right fit?
So, while expanding the business horizon, it is important to provide a larger bouquet of benefits to the end consumers as well. This could be easily done by integrating businesses with the TurtleFin One API, which meets all requirements of this digital outreach by providing the technological platform, an insurance distribution solution to its partners.
TurtleFin One’s API allows for custom bundled plans, improved pricing assessment to increase sales, built-in safety, and expedited claims evaluations with fast reimbursement. Customers want access to insurance at the moment of payment which allows them to check out with confidence with embedded insurance exactly when and where they “need” it.
Today, an embedded insurance system provides the best opportunity for all businesses, particularly Fintechs, to gain huge profits in 2022 and even beyond.