Embedded Insurance - Overview
Embedded insurance is a type of insurance that is integrated into other products or services, such as car insurance embedded into a car purchase or travel insurance embedded into a plane ticket. The concept of embedded insurance is to make it easier for customers to buy the insurance and to fill protection gaps. Embedded insurance offers a number of advantages over traditional insurance products. It can provide more relevant and personalized coverage, as well as lower distribution costs. Additionally, embedded insurance can lead to increased customer loyalty and sales for the company offering the insurance. It also fills the protection gap by providing insurance as a service where customers may not have thought of buying insurance.
How Embedded Insurance Works?
Embedding insurance into other products or services involves integrating insurance coverage into a pre-existing product or service. This can be done in a number of ways, such as offering a bundled package that includes the product or service and insurance coverage, or by making the purchase of insurance coverage a necessary step in the purchase process of the product or service.
The benefits of embedded insurance for both consumers and businesses are many. For consumers, embedded insurance can provide more relevant and personalized coverage, as well as lower distribution costs. Additionally, embedded insurance can lead to increased customer loyalty and sales for the company offering the insurance. For businesses, embedded insurance can provide a new revenue stream, increase customer loyalty and retention, and also fill the protection gaps.
Examples of Embedded Insurance Products
Embedded insurance products come in a variety of forms, such as embedded life insurance, embedded travel insurance, and extended warranty insurance.
Embedded life insurance is a type of life insurance that is integrated into other products or services, such as a bank account or investment. It provides coverage for the policyholder in the event of their death.
Embedded travel insurance is a type of travel insurance that is integrated into the purchase of a plane ticket or other travel-related product or service. It provides coverage for unexpected events that may occur during travel, such as trip cancellations or medical
What is Embedded Value?
Embedded value is a measure of the value that an embedded insurance product provides to its customers. It is calculated by taking into account the expected future cash flows from the embedded insurance product, as well as the value of any assets that may be associated with it. The calculation of embedded value typically includes factors such as the premium income, claims, expenses, and investment returns associated with the embedded insurance product.
The embedded value of an insurance product is important because it helps to determine the overall value of the product for both the company offering the insurance and the customer purchasing it. A higher embedded value indicates that the product is providing more value to the customer, which in turn can lead to increased sales and customer loyalty for the company. Additionally, embedded value can also be used to compare different embedded insurance products and determine which one is the most beneficial for a customer.
Why is embedded insurance important?
Embedded insurance refers to insurance coverage that is included as a component of another product or service, rather than being sold as a standalone product. This type of insurance is becoming increasingly popular as it offers convenience and value to consumers, as well as a new revenue stream for businesses.
What are the 4 main types of insurance?
The four main types of insurance are:
Life insurance provides financial support to a person's loved ones in the event of their death.
Health insurance helps to pay for medical expenses.
Property and casualty insurance, which protects against loss or damage to property, such as homes and cars.
Liability insurance covers legal responsibility for accidents or injuries that occur on your property or as a result of your actions.
How does embedded insurance work?
Embedded insurance works by including insurance coverage as a component of another product or service. For example, a car manufacturer may offer an extended warranty that includes insurance coverage for certain types of damage. A mobile phone manufacturer may include accident coverage with the purchase of a phone. A credit card company may include travel insurance as a benefit for cardholders.
How do you calculate embedded value?
The embedded value is a measure of the value of an insurance company's in-force business. It is calculated by taking into account factors such as the present value of future profits, the value of outstanding claims and the value of other liabilities.
What is an embedded insurance product?
An embedded insurance product is a product or service that includes insurance coverage as a component. Examples include extended warranties, mobile phone insurance, and travel insurance included with credit card benefits.
What is embedded life insurance?
Embedded life insurance is a type of life insurance that is included as a component of another product or service, such as a mortgage or a credit card. It is designed to provide financial protection for the borrower or cardholder in the event of their death.
What is embedded travel insurance?
Embedded travel insurance is a type of travel insurance that is included as a component of another product or service, such as a credit card benefit. It can provide coverage for things like trip cancellation, medical expenses, and lost or stolen baggage.
Embedded insurance is a growing trend in the insurance industry that has the potential to revolutionize how we think about and purchase insurance. By embedding insurance coverage into other products or services, companies are able to offer more relevant and personalized coverage options to their customers, and consumers are able to access insurance in a more convenient and cost-effective way. With the help of platforms like Trellis Connect, embedding insurance has become more accessible for businesses of all sizes, leading to increased competition and innovation in the industry.
Embedded insurance products are a valuable solution for those looking to fill protection gaps and find personalized coverage options. As the industry continues to evolve, it is worth considering embedded insurance products for their own coverage needs. With the right coverage, consumers can feel more secure in their daily lives, and businesses can increase customer loyalty and retention.
Talk to us to find out more about embedded finance or our other white-label solutions.
Watch this space for more updates as we roll out more features to accelerate financial product innovation. As always, connect with us below to learn more about how innovative card programs and scalable features can power your financial product or fintech program.