3 min read
In one of our previous blogs on affinity partnerships, we touched on the topic of embedded insurance whereby a customer is offered insurance coverage on top of a product or service within the same purchasing process (e.g. adding travel insurance when buying a flight). According to industry experts, this is an estimated $3 trillion market opportunity.
A poll from psKINETIC, however, has revealed the three main barriers to creating and launching new embedded insurance propositions. These are: legacy systems, an inability to digest new data, and proposition design.
Once aware of the specific challenges it would be foolish not to employ the correct and most effective solution to overcome them, namely insurtech. However, insurers might be overwhelmed by the huge amount of options out there in the market and also suspicious about their product proposition or maturity.
In this blog, we provide a strategic compass with suggestions to help to discern the right insurtech partner.
How to choose the right insurtech partner
The soundness of a partner will depend on the kind of solutions they are offering. To make sure the final choice is as correct as possible, consider the following approaches:
1. Focus on process first
Embedded insurance without a powerful process running in the background will just highlight its inefficiencies. Make sure the new solution is able to handle your process efficiently.
A poor-performing process will result in a bad customer experience and weak operation, with an exponential increase in costs.
2. Look for modular and flexible solutions
Look out for low-code solutions, so that the process can be handled directly by you or by your partners through easy front-end configurations. This will increase speed whilst reducing the cost of change, with no need to engage in lengthy iterations that require highly-costly technical profiles.
Feed two birds with one scone. Look out for modular solutions that allow the propagation of the same insurance process (with minor tweaks) into direct and embedded channels with the minimum effort.
3. Strive for personal interactions
With the end-customer in mind, move away from one-size-fits-all solutions such as webform. They have been proven un-performing due to their inflexible frontend, high maintenance cost, and inability to contextualise.
Also, as affinity partners will come into the equation, look out for insurtech partners that allow easy configuration of the frontend to mirror different brands.
Insurtech solutions that work for embedded insurance
Just like the modern concept it is, embedded insurance was conceived to cater to the modern customer who is looking for multiple services under one umbrella at a reasonable price. It figures, then, that the technological solution and ecosystem to carry it out should be of the same streamlined nature and be able to create ease and convenience for customers.
Conversational Process Automation (CPA) is one such insurtech solution. When configured to integrate into a business's existing ecosystem, it is capable of the following:
- Connecting with consumers through 24/7/365 available chatbots
Customer service is a huge parameter for determining customer satisfaction these days. Customers expect their issues to be resolved as soon as possible. People, while empathetic, can never be available as readily and easily as technology. Hence, using chatbots as part of CPA will keep customer service flowing seamlessly no matter the size of the insurance business.
- Connecting with insurance core systems (policy, billing, and claims systems)
CPA has the ability to seamlessly integrate with existing insurance systems. This ensures the previous operations aren't disrupted and are, in fact, optimised. In the absence of such an integration, it is possible that operations might destabilise and even fall through. CPA is a well-rounded technology solution, able to cater to various branches insurance.
- Providing rich and actionable data
This is a huge benefit that CPA brings to the table. Through regular analysis of the conversations happening, CPA is able to generate reliable data about what customers truly want and feel is lacking.
Is it worth it to grasp the opportunity that embedded insurance presents? Absolutely! But it is to be done only after careful analysis. If embedded insurance is implemented without the right support system and partner, it exposes the business to the risks of not only losing customers but also ultimately affecting the insurer’s reputation. However, if done right, the rewards can keep on compounding exponentially and benefiting the company in the future. Take Warren Buffet’s words for it:
Someone's sitting in the shade today because someone
planted a tree a long time ago.