How Embedded Insurance Is Changing India’s Insurtech Landscape
It took a pandemic to force multiple sectors to accelerate their digital agendas and insurance is no different. As per a recent global survey, 96% of insurance CEOs felt that COVID-19 served as the digital catalyst that fast-tracked digitisation of operations and led to the creation of next-generation operating models.
A growing spate of insurance companies and ecommerce firms are now integrating artificial intelligence (AI), internet of things (IoT), big data analytics, machine learning, open application programming interfaces (API), and other technologies to deliver a hassle-free customer experience and transform the Indian insurance industry. Embedded insurance is only getting started, but it has the potential to become a trillion-dollar business.
What Is Embedded Insurance?
Embedded insurance is the real-time bundling and sale of insurance when a consumer purchases a product or service at the point of sale. This insurance could either be complementary (like a warranty) or a consumer may need to pay a nominal fee above the transaction cost. Embedded insurance is made simple and affordable through this issuance process, which also gives insurers access to untapped and underserved markets.
For instance, rural India has a high demand for life insurance products, but traditionally, it has been difficult to sell these services there. With the advent of embedded insurance processes, insurers can now serve this untapped market by providing services like credit life insurance, hospicash, and personal accident Insurance through microfinance without having to rely on costly distribution channels like conventional banks.
How Is It Disrupting The Industry?
Embedded technology is changing the way people buy insurance by expanding opportunities and building strong customer journeys, making it easier for customers to access insurance or warranty products throughout the purchase cycle.
Here are some examples:
Online cab services are offering ride insurance for an amount as low as Rs.2 while you are making the booking.
Warranty and insurance products are being offered while purchasing electronic devices, appliances against theft, appliance protection, etc.
Travel aggregators have embedded travel insurance for loss of luggage, trip cancellation or delay.
Along with seamless purchase journeys, the breadth and depth of embedded products is rapidly increasing.
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