And lastly, insurance has long been a ‘one size fits all’ type of business, and here as well next gen-ers are pushing the industry to change. Personalisation is a key element for next gen-ers and such, it’s one of the prominent insurance trends lately. A Capco survey found that 47% of next-gen policyholders are willing to share data from smart home devices with an insurance company to generate personalized products and services, this can help insurers not only to capture their segment but also reduce expenses for unnecessary policies and marketing costs.
Go Embedded or Go Home
Personalization is an important element, but it does not stand alone. Next- gen-ers also expect a holistic and smooth customer experience – where digital offerings are bundled with other products and services. This concept is already known as embedded offerings, meaning that a certain product contains other relevant products or services within it. This is different to “add-on” products which customers are offered and can add to their purchase. Embedded Insurance has been part of the insurance ecosystem for some time now, but in the past two years it gained a lot of attention as more and more studies have shown its value and the great market opportunity it holds.
In 2020, Simon Torrence, a well known advisor for business growth published a Linkedin article on embedded insurance, stating that “Embedded Insurance could create over $3 Trillion in market value by 2030”. This market is mostly dominated by Insurtechs that build the technological solutions that allow for insurance to be embedded within other digital products.
The global insurtech market size is expected to reach USD 152.43 billion by 2030, registering a CAGR of 51.7% from 2022 to 2030, according to a new report by Grand View Research, Inc. The rising awareness about the benefits of insurtech solutions in simplifying the claim process, improving communication, and implementing automation is expected to drive market growth.
Examples of Embedded Insurance range in insurance lines (such as P&C, life, dental health, etc.). One example could be car insurance based on collected data on how well and how much you drive – Pay as you Drive/Pay how you Drive. Health or life insurance based on data regarding your lifestyle collected from smart watches or health apps is also one of the rising insurance trends.
Embedded insurance presents a great value for next-gen-ers, as they are highly price-sensitive and savvy consumers – comparing prices, identifying discounts, and reading reviews in trying to find the perfect, most personalized, and convenient solution for their needs.