What is Embedded Insurance?

Companies across industries are building digital solutions to compete for consumer attention and meet demand. Embedded insurance offers a unique opportunity for those that want or require their business customers to purchase commercial insurance coverage, streamlining the customer experience and closing coverage gaps. ‍

Preference for digital self-service was on the rise among personal consumers before the pandemic. The self-service market’s compound annual growth rate is expected to increase by over 16% through 2026. This growing demand has encouraged many insurers to adopt a digital presence.

Now, small and midsize businesses (SMB) also want the ease of commercial digital transactions — everywhere.

When it comes to self-service insurance models, embedded insurance is king. Rather than offering a simplistic add-on purchase at checkout, the real power of embedded insurance is when SMBs are offered relevant coverage options as they engage with a trusted company's product or service, making the insurance buying experience easy and customized when they need it most.

Insurance carriers and service providers have taken notice of the desire for an insurance buying experience during the customer journey, as the embedded insurance market is expected to grow by 31.9% in 2022.

The magic of embedded insurance is the quick, branded experience organizations can offer SMBs. For example, organizations that require their clients to carry cyber insurance can win SMB prospects and retain them as clients by enabling the insurance purchase directly from their site during the SMB’s customer journey.

The prospective client does not need to leave the organization’s online journey or spend time researching what insurance they need to comply or where it can be found. They can be confident about their choice, quickly fill out their application, receive real-time quotes and leave the site with a finalized policy and proof of insurance within minutes.

4 benefits of implementing embedded commercial insurance in your offerings

New revenue streams are just one reason to implement embedded insurance into your organization’s online offerings. The increased value this feature brings to your SMB clients directly impacts your business’s performance and relationships. Here are four ways embedded commercial insurance can benefit your organization:

1. Know the client is protected. Insurance is an afterthought for many businesses. Whether due to economic pressures such as record-breaking inflation, or finding the time to research the right coverage, SMBs can easily push off securing the protection you encourage or require for your services. Embedded insurance takes the stress of another task off your client’s plate, ensuring they secure coverage by bringing the option directly to them at the point of sale or during their journey on your site, in effect closing the protection gap that has been steadily growing every year.
2. ‍Provide peace of mind in a volatile world. There are many reasons SMBs want to invest in more insurance. These include feeling more financially vulnerable than before the pandemic and an increased understanding of the importance of coverage due to significant losses to SMBs in the last few years. Organizations that have already gained an SMB’s trust in one area can become valued resources to them in their pursuit of additional needs, including finding the right coverage, due to their reputation and the convenience factor. According to Deloitte, 90% of SMBs are receptive to purchasing coverage from non-traditional outlets (online retailers, banks, etc.) and more interested in evolving organizations that can offer smart integration of such an option. When insurance policies can be upward of 100 pages, SMBs seek alternative options that save time and expand their portfolio’s safety umbrella.‍
3. Deliver speed of service when binding commercial coverage. It’s all about providing tailored insurance seamlessly throughout the customer journey and doing it fast. From the moment a client begins a quote, data collected immediately takes the work off the user, creating bespoke insurance options and eliminating the hours of back-and-forth communication and weeks of wait that traditional insurance offers. The result is commercial coverage that is available in minutes, online, and with proof of insurance in real time.‍
4. Experience greater customer retention rates. There is nothing groundbreaking about the fact that organizations that best serve their customers also manage to see increases in revenue. When customers are satisfied, they tend to come back for repeat business or recommend your business. The innovation comes from surprising and delighting your SMB customers with easy, supplemental offerings like insurance. The experience feels more personal by directly filling their needs, and adds stickiness through a more thorough customer experience.

These benefits are not limited to SMB clients who want to buy direct. While increasing numbers of SMB customers want to purchase insurance on their own, others prefer the guidance of insurance professionals. Truly embedded commercial insurance can be placed anywhere, including on agency portals of carriers, wholesalers, and MGAs. Single-sign on is available for easy access by producers. Plus, when embedded systems contain built-in underwriting, the requirement for insurance producers to learn niche market requirements is reduced or eliminated.Everyone benefits from embedded insurance. Whether you are a carrier, wholesaler, producer, financial institution, neobank, technology company, professional organization, affinity group, or insurance producer, all the benefits of fast service and stickier customers can be realized by embedding insurance on your site. With SMB clients who are better protected, faster, it’s a win all around.

Reach out to embed insurance in your world. Contact iBynd,  Phil Friedman or Jonathan Levy.‍

| DISCLOSURE This information is intended for informational purposes only. All insurance statements and examples made herein are subject to the terms, conditions, and exclusions of the applicable insurance policy. Coverages and features may not be available in all states. Eligibility is subject to the applicable underwriting criteria set forth by the insurance carrier. |

(1) Research and Markets “Self-Service Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026),” January 2021.

(2)  Research and Markets “Global Embedded Insurance Business and Investment Opportunities - Q1 2022 Update,” February 2022.

(3)  Deloitte “The future of small business insurance”