In the future, some of the ways insurtech will revolutionise e-commerce include insurance when it is needed and an improved claims experience.
Insurance is frequently an afterthought in the e-commerce world. The focus for the buyer is on the need for a product, while the focus for the seller is on the actual assets within a business. Nobody thinks about where to get a new insurance policy when they wake up in the morning, and there are numerous obstacles to entry when it comes to insurance as a product. This is where embedded insurtech comes in; the right marriage of insurance and technology combines applicable protections for both the buyer and the seller throughout the customer journey.
There are already a number of examples of insurtech in the e-commerce industry, including optional flight delay insurance, insurance included in the purchase price (as offered by companies like Tesla), and coverage for the merchants who provide the product, such as Anansi’s embedded goods in transit insurance.
The desire for embedded insurance is undeniable; according to a recent analysis from InsTech London, this market may be worth $722 billion in Gross Written Premiums (GWP) by 2030, with China and North America leading the way. The development of embedded insurance is focusing on e-commerce, and we expect to see the following developments emerge over the next few years.
Insurance when you need it
Offering the product to a consumer when they believe they need it most is a significant aspect in enhancing the perceived value, and thus the uptake, of insurance. Typically, this would be at the point of sale; for example, if flight delay insurance is provided to you when booking a flight, you are more likely to be aware of it. Convenience is also important; some conventional offline policies are difficult to keep up with.
Because technology has revolutionised the consumer experience, the days of calling an insurance broker to purchase and claim on a policy are essentially over. The insurtech industry uses technology to automate the entire process, eliminating the need for hundreds of forms and repeating data.
Trust through brand loyalty
Trust continues to be a driving force in the insurance sector, as well as a barrier at times. There is a clear need for merchants to be linked with insurance that they trust, and for insurers to partner with brands that have the necessary exposure and brand loyalty, particularly in e-commerce. Recent instances include the five-year agreement between John Lewis and Munich Re, which will allow the German insurance to enter a new market while also associating itself with a well-known and reputable brand. In Europe and Southeast Asia, IKEA partnered with iptiQ/Swiss Re to create a digital home insurance solution. On a smaller scale, Anansi’s zero-admin parcel insurance is an alternative for SME e-commerce enterprises.
Experience a simple insurance onboarding process
The beauty of embedded insurance products is that they can use client data from the e-commerce platforms with which they’re integrated to make customised coverage recommendations depending on the needs of that particular customer. This saves time and resources for both the merchant and the customer when filling out insurance documents, and it helps to alleviate concerns about the necessary level of insurance coverage being acquired. Amazon’s extended product warranty insurance is an excellent illustration of this, as it is smoothly incorporated into the transaction and customised to the exact product being purchased.
Responsive to your needs
Insurers can deliver innovative products that are more responsive to the merchant’s demands by integrating insurance into e-commerce systems. This is particularly beneficial in areas like the gig economy, where Zego’s usage-based insurance for Deliveroo drivers can be priced down to the minute, offering a specific level of coverage that is sensitive to individual needs.
Excellent claims experience
Claims are the “store window for insurance,” as Convex Group chairman and CEO Stephen Catlin accurately points out, because claims are where the initial insurance promise should come to reality. Indeed, issues and discrepancies in customer service and claims are among the numerous reasons traditional insurers have a poor Net Promoter Score (NPS). Embedded insurtech sets itself apart by emphasising the use of data to expedite the claims process. If certain criteria are met, such as the occurrence of a specific undisputed event, a compensation is paid automatically.
So what does the future of E-Commerce look like?
We expect to see more customised items offered during the purchasing process or integrated into the present product price and customer service silently and effortlessly. For both the client and the merchant, there will be no need to fill out long insurance forms with repetitious information that may be found elsewhere. As a business’s needs vary, this embedded insurance coverage will evolve to guarantee that they are paying the exact amount for the insurance they require.