Infographic – Embedded Insurance: Key trends in this fast-growing market
By Anais Descleves - 23 June 2022
Embedded insurance is a flexible model that allows insurance coverage to be associated with the purchase of a product or service. It enables a third-party provider to integrate insurtech products into its customer journey.
In our infographic (bottom of page), we present some key statistics about the embedded insurance market. We also highlight the main advantages it can offer for insurers and customers. Finally, we share information on the main startups making their way into the embedded insurance landscape.
Key statistics and drivers of the embedded insurance market
When it comes to the embedded insurance market, here are 6 numbers to keep in mind:
- The embedded insurance market is predicted to weigh $3 trillion in 2030.
- The digitalisation of the insurance market in Europe has grown from an average of 23% to 31%, an increase of 35% in 2020 (McKinsey, 2020).
- Estimates predict that “fully embedded” insurance distributed through partner channels will generate $140 billion in Gross Written Premium (GWP) by 2030 in Property and Casualty alone (OECD, McKinsey, SwissRe Institute).
- There was a rise of $2.3 billion in the API field in 2020 alone (Crunchbase, 2020).
- The cost of distribution of insurance products represents 50% of the total industry costs.
- The market value of embedded insurance in the United States is estimated to reach $70.7 billion in 2025 (Statista).
What are the advantages of embedded insurance?
Embedded insurance can benefit both insurers and customers.
For customers, it enhances the customer experience by simplifying insurance purchases. Thanks personalised insurance, buyers can protect their purchases more easily.
The protection gap is the difference between insured and uninsured losses. By offering coverage at the point of sales, customers can purchase insurance at the right time and therefore, close the protection gap.
On the other hand, insurers get a better reach to their customers with this flexible approach that creates more opportunities for them. Moreover, the insurer is able to customise their products and services thanks to the already existing data collected by the third-party provider, which reflects the real risk more accurately.
Startups making their way into the embedded insurance landscape
Penni.io is a digital distribution solution for insurance companies and insurance brokers. The startup focuses on customer insights, allowing to build customer-centric products, a key lever to achieve success with embedded insurance products. It has a strong focus on customer experience, allowing its partners to improve their acquisition cost over time. Competitors focus on making their back-end architecture flexible and easy to adapt, but few analyse the customer behaviour at every step of the buying process. As the startup makes the data available to both the insurer and the third-party platform, it allows for more powerful conversion funnels.
Element Insurance is a technology-driven insurance company that offers custom-made, white-label solutions for digital insurance. The startup is one the frontrunners in this innovative market in Europe. Element Insurance developed a fully digital accident insurance for their client Manufaktur Augsburg. They offer four tariff variants (Basic, Classic, Premium and PremiumPlus protection) for a period of 1-3 years. It includes comprehensive coverage of all relevant parts.
Qover designs, builds and distributes innovative digital insurance solutions across Europe to help fast-growing companies. It claims to have the most international embedded insurance product in Europe. Their insurance is embedded on Angell Bikes’ website and displayed for every order with a simple fee and clear policy. Deliveroo is one of Qover’s oldest clients on the rider protection. All riders logged can benefit from it via the driver’s app, and the cover is tailormade for everyone based on their data. Their insurance covers personal injuries for all riders, up to €5,000,000 for bodily injury and/or accidental damage per claim per year.
Simplesurance creates a platform for simple access to insurance to combine traditional insurance industries with digital business. Thanks to the backing of industry players and investors, it has become a leading insurtech player. In May 2021, Simplesurance partnered with N26 to launch the bank’s on-demand insurance product. Thanks to Simplesurance’s technology, N26 embedded home insurance, life insurance, pet insurance, bike insurance to their application.
Nuclicore is a very early-stage no-code tool for insurers. It is a software company, servicing the insurance industry with an intelligent top-notch software product. It is possible to build any API or application via drag & drop, without writing a single line of code. Nuclicore is a 100% system-agnostic.