ITC DIA Europe

Beyond coverage: the future of embedded insurance strategies

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Mar 18, 2024

We were joined by Pablo Fernández, Sales Vice President Affinity – Europe, at Marsh, to discuss the latest innovations in embedded insurance and how the industry as a whole can take advantage of this emerging space.

Pablo, what is your view on the importance of embedded insurance for brands?

“Let’s start with the basis of what embedded insurance is: it’s working with a non-insurance partner in offering insurance coverage for a product/service seamlessly during the customer sales journey. By embedding the insurance during the sales process, the partner is able to offer the protection at the right time, with the right product to meet the specific needs of the end-customer.

Before pursuing an embedded solution, a partner should have a clear objective on the goals that they want to achieve through an insurance program. The business objectives may be to increase brand loyalty, strengthen customer satisfaction, or generate additional revenue streams.

The next step to consider is whether insurance complements your current your product/service offering? Will offering insurance meet customer expectations? Does your organisation have a high brand awareness? Will your customers trust buying insurance from you?

These are critical issues that need to be addressed at the start.”

What are the key points that any insurer should consider so that embedded insurance is successful?

“It is important to realize that an embedded solution isn’t controlled by the insurance company. The insurance product is being sold by a non-insurance type of distributor, a company, or a partner.

In order to create a successful program, the insurance product needs to be basic and easy to understand with a clearly defined customer journey, both for acquisition and servicing.

Additionally,  data transparency and data sharing play a critical role as you will be leveraging relationships with ecosystem partners. This may require sharing data between partners whether they are the insurer, broker, client, or other third-party providers. Given the strict regulations on data sharing, it helps to work with a broker or adviser who has experience in managing embedded insurance programs across regions and globally.”

What is the role of embedded insurance in the actual digital transformation of the insurance industry?

“I think that there are several areas in which embedded insurance will help the transformation of the industry. The first one is distribution, which changes the rules of the game. You need to rely on APIs and digital platforms. It’s a different ballgame when it comes to building the value proposition. It isn’t a value chain anymore, but an ecosystem partnership. It isn’t the same thing to offer embedded insurance in a bank insurance type of model, compared with traditional insurance distribution: employees might not be as familiar with the product’s specifics. Distribution is a value proposition business model you need to share with others. It’s no longer a win-win, but a win-win-win. The last type of distribution model and for sure not the least is data sharing. If you’re not open to sharing data, you should consider other ways to make your business grow and not leverage embedded insurance.”

What are the different steps in implementing embedded insurance?

“There’s no magic formula, but there are still some tips I can share with you, based on my own experience. The initial step is to make sure that you have the right partners to run the business. Embedded insurance is like an agnostic type of product-oriented distribution model. You need to consider broker that you want to work with who will fit all the pieces of the distribution model for you. I’ve outlined the key steps in setting up an embedded insurance program:

  1. Understand your current proposition and customers
  1. Review and select partners for placement (insurer, MGA, Insurtech)
  1. Scope your digital and data requirements
  1. Map out the customer journey
  1. Support marketing your program
  1. Utilise data analytics to provide insights
  1. Provide options on the claims process
  1. Help you expand the program

The ability to stay agile and continue to push and learn how to solve new problems will help you keep one step ahead in driving innovation.”

What do you think the future looks like for embedded insurance?

“According to the forecasts by 2030 embedded insurance will have a market share somewhere between 15% and 20%, with estimated premiums of €2.5 trillion. I think that’s a little too optimistic. If we look at what our colleagues from the reinsurance are saying, it will be somewhere close to €1 trillion. We see that there are different speeds in the adoption of digital insurance:  not all  countries will adapt embedded insurance at the same rate. UK is leading the way; they are well advanced compared to other countries in continental Europe. But still, we consider that by 2030 there will be between one-fifth and one-fourth of the total distribution of insurance in Europe being done by an embedded insurance type of distribution model, with the size of that market within Europe somewhere between €250 billion and €300 billion.”

Who is Marsh?

With offices in over 130 countries, Marsh is one of the world’s leading insurance brokers and risk advisors. They provide industry-focused brokerage, consulting, and claims advocacy services, leveraging data, technology, and analytics to help reduce clients’ total cost of risk. They provide commercial and individual clients with insights, advice, and support in the local markets in which they operate or where their business may face risks.

The Affinity practice within Marsh has been operating for over 30 years collaborating with iconic brands and pioneering innovative insurance solutions.

Pablo Fernández, Sales Vice President Affinity – Europe, at Marsh
Amsterdam 12-13 June


00 Days
00 Hours
00 Minutes
00 Seconds
Have a look!
ITC DIA Europe - Amsterdam 2024 - Register here! Purchase now!