In a recent showcase at the Singapore FinTech Festival, Arijit Chakraborty, Managing Director APAC, discusses the convenience of Embedded Insurance and the paradigm shift in insurance distribution. 

Traditionally, insurance has been distributed through a broker or via an insurer’s website. For most, the pandemic has shifted purchasing behavior with consumers moving towards buying a product or service from their favorite online app or store. In order to align with this change in behavior, insurance distribution has moved towards embedding relevant insurance offerings into the customer’s purchase journey by leveraging customer data. 

The motivation for this shift is highlighted in a recent survey conducted with PYMNTS.com and momentive.ai in 14 countries; 49% of respondents selected ‘convenience’ as their primary motivation for purchasing insurance due to the fact that traditionally, purchasing insurance required a second step separate from the checkout process whereby consumers had to seek out relevant protection themselves. Since modern consumers now expect a seamless experience from their favorite online store, the world’s largest digital companies such as Flipkart and Ola offer embedded protection to give them peace of mind on their purchases and bookings.

Arijit believes that “moving from standalone insurance transactions and leveraging transactional data to offer insurance for primary products and services” will be the future of insurance distribution and the global survey results on embedded insurance reiterates his statement. Of the respondents worldwide, 78% of digital bank customers are highly interested in receiving bank-embedded insurance offers and 82% of customers who used traditional insurers or brokers in the past are highly interested in bank-embedded insurance offers next time. 

The effects of the pandemic have caused attachment rates to increase by 647% and this reflects shopper expectations. As such Arijit emphasizes that “embedded insurance is not a trend. It is here to stay. We’re just cracking the surface and there’s a long way to go.”