The “Protection Effect” study: Adding relevant protection increases core conversion rates by 8%
Responding to customer preferences in embedded protection
Across multiple studies conducted by Momentive.ai and commissioned by Cover Genius, the findings consistently show that consumers – in pursuit of convenience – want embedded protection from their favorite banks (61% of consumers are highly interested), fintech apps (86%) and e-wallets (75%), travel companies and airlines (45%), retailers (60%), short-term rental sites (98%) and realtors (22%), directly in their sales and sign up processes.
The figure increased dramatically (from 38% to 77%) for those who recently experienced a life event that might trigger an insurance consideration e.g. home buying, pregnancies, pets, major purchases, etc, and also increased dramatically if they’ve recently made a claim. Traditional insurers are also contributing to the push for change, as evidenced by their astonishingly low Net Promoter Scores (for example, -48 in ticketing, -25 in travel and -3 in the property industry) and the surprisingly low penetration of protection at the point of sale (59% of customers in Retail didn’t receive a warranty offer, while a majority of homeowners, renters, landlords, travelers and even ticket buyers were also not shown a protection offer).
Offering protection shown to increase core conversion rates 8%‡
By adding relevant protection to purchases, our partners can provide their customers with a sense of security and protection while growing revenue and increasing brand loyalty.
Data collected by Cover Genius, working in tandem with a fintech partner that ran a series of experiments, shows that adding protection to the checkout experience increased purchase conversion rates by 8%‡. The significant boost in sales comes from offering protection at the point of sale that’s directly relevant to the underlying purchase. This “Protection Effect” allows XCover partners to benefit from more satisfied customers, which in turn increases confidence and willingness to make major purchases.
Chart showing the impact on core conversion rates since integrating XCover‡
Optimizing the checkout journey with convenient and relevant protection
When customers proceed to check out, they see on-demand offers to protect their items. Behind the scenes, XCover uses natural language processing (NLP) techniques to ensure that policies are relevant to the purchase so that customers are offered protection on a drill rather than a screw, for example.
By introducing our XCover protection offer at checkout as customers choose to confirm payment, rather than offering no protection at checkout, our fintech partner experienced an 8.5% relative increase to their core conversion rate, from 17.5% to 19%. The experiments each ran for about 20 days on 20% of their checkout traffic and took into account more than 100,000 checkout visits. What we tested were two variations at checkout:
- Variant 1: the check-out path without Product Protection offering
- Variant 2: the check-out path that embeds Product Protection offering
The introduction of our tailored protection embedded within the customer journey led to:
- Increased revenue – More customers are completing their transactions and making purchases, which has a direct positive impact on the partner’s bottom line without any added expense.
- For fintech companies such as Buy Now Pay Later, and e-commerce payment gateways, a solution that increases core conversions so significantly creates significant differentiation and merchant lock-in.
- Happier customers – Tailored protection that’s relevant for every user backed by instant payment of approved claims and zero paperwork leads to plenty of customer joy!
