In Asia, embedded insurance has developed into an integral part of many product life cycles, according to InsureMO chief revenue officer Rajat Sharma.
For instance, he said, health technology companies offer telehealth services, which include embedded insurance products. “There are even cyber fraud embedded insurance products,” he said.
This integration means that embedded insurance has adapted to both types of insurance carriers – which are going in separate directions. “One type is the purely digital insurance carrier born in cloud-native infrastructure such as Aegon Life. The other consists of large traditional carriers such as Income,” Mr Sharma said.
Digital carriers that sell policies and service claims work on partnership models, he said, which offer embedded insurance companies many collaboration opportunities.
Among traditional carriers, digitalisation of the bancassurance distribution channel has led to an opportunity for embedded insurance companies. “When the sale of a policy is being processed over the bancassurance distribution channel, an embedded insurance product would be included in the process,” he said.
Embedded insurance is now also a standard offering on ride hailing applications such as Grab in Singapore, he said. “It costs approximately S$1 ($0.75) on these applications and are considered bite-sized products that are growing massively,” he said.
Fraud detection would have the potential to be better in terms of managing claims due to technology know-how as well, Mr Sharma said. “After all, it is the technology companies that are doing the embedding of the insurance products,” he said.
The industry would continue moving towards embedded insurance products in the future, according to Mr Sharma. “Whether it is life or health insurance, or even P&C, it will likely be embedded to some extent,” he said.
One of the biggest benefits would be the opportunity to use recorded data to better understand consumers, buying patterns and even risk profiles. “Moreover, moving in this direction would lower the cost of distribution,” he said.