How embedded insurance is creating a seamless user experience for both consumers and merchants

Today, consumers interact with embedded insurance without realising it. It’s so commonplace you don’t hesitate as you add travel insurance to your cart while booking the flight for your next summer holiday in Croatia, or think twice as you ask for inclusive coverage when renting a vehicle from the car rental company before driving to your seaview Airbnb. 

Historically, however, embedding insurance into these kinds of products has presented a challenge for companies because of the technical expertise required to implement changes, and the added complexity of ensuring compliance with regulatory standards. 

APIs have gone some way to addressing these issues. They create standardised interfaces with simplified integrations that make it possible for companies to plug additional insurance products seamlessly into existing offerings.  

How embedded insurance is expanding into new industries

Insurance is still primarily embedded within sectors seen as a natural fit, in particular automotive, travel and electronics. Yet, with the emergence of the gig economy, which has empowered flexibility and choice for workers, new forms of insurance have also emerged.

One key example includes the integration of insurance provided by insurtech startup Zego into Amazon and Uber’s platforms. These products fill the gap where traditional insurance offerings cannot cater to gig economy workers. 

API infrastructure will enable new industries to integrate insurance products, causing the market to rapidly balloon in size in the next few years. It is expected that $5 trillion of insurance could be distributed by non-insurance brands over the next decade, per the 2022 Embedded Insurance 2.0 report. 

Benefits for merchants

With the advent of APIs, it’s now easy to integrate embedded insurance into the e-commerce industry. Companies like goods-in-transit insurance provider Anansi enable platforms like Shopify to adequately cater for both merchants looking to sell products and consumers keen to buy them.

Merchants on EKM, for instance, can easily add Anansi’s insurance via the app store. That allows merchants to protect customer deliveries and insure the shipping process. Previously, EKM businesses would have to contact the insurer, gather evidence to submit, and then, if accepted, wait several days for an insurance payout, which may not even cover the full value of the item.

Embedded insurance provides numerous advantages, including automated claims, fast reimbursements, and customisable coverage. With our solution, merchants can fully concentrate on building and selling their products, eliminating the burden of additional administrative tasks associated with insurance.

A significant advantage of automated claims is the emphasis placed on streamlining the process. Merchants can benefit from the convenience of hassle-free claims handling; the advanced system automates the submission and evaluation of claims, ensuring a swift and efficient reimbursement experience. Reducing manual intervention and minimising paperwork, saves valuable time for merchants, allowing them to focus on their core priorities of business development and growth.

Leveraging an embedded insurance solution allows merchants to confidently rely on a robust infrastructure to protect their business, while enjoying the convenience and efficiency of automated claims. This empowers them to allocate resources more strategically, drive growth, and maximise their overall potential.

The pros for consumers 

Now that merchants are no longer bogged down by the admin of insurance claims, customers with lost packages can be refunded more easily and quickly. That builds trust between merchants and the consumer and increases the likelihood of the customer becoming a repeat customer. 

Through a recent partnership with Wowcher, Anansi customers also benefit from its new ability to rectify shipping mishaps faster, recoup the total retail value of lost items and have greater oversight and control of the customer delivery experience. As much as it saves time for the merchant, it also saves time for customers as well who don’t have to write complaints or queries regarding lost and delayed parcels.

The future of embedded insurance 

Ultimately, we are still in the beginning stages of embedded insurance’s development. Along with logistics, embedding insurance will become the norm for firms as the sector seeks to hyper-personalise insurance offerings to sectors and the clients they serve. 

Insurance has been monopolised by traditional players for decades, meaning user experience for both the merchant and the customer has remained stagnant. Insurtechs are playing a pivotal role in distributing the role of the insurer. They enable industries to offer insurance that is automated, cost and time effective and ready for the e-commerce era. 

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