If there’s one thing consumers want these days, it is to feel safe and to have peace of mind when they’re doing business online. It’s all part of the growing thirst for simpler forms of consumer protection. With the help of deep transaction-based data, sellers can deliver “hyper-relevant” embedded insurance offers.
“Whenever people are buying a product or service, if you have embedded insurance as part of the journey, there will be a maximum conversion effect,” said Arijit Chakraborty, managing director of the APAC region at Cover Genius, in an interview with PYMNTS, adding that it’s an idea that has big appeal in all areas of commerce.
Traditional insurance just doesn’t cut it anymore, Chakraborty said. Banks today have an insurance tab where people are offered a host of related products. But those are mainly standalone offerings that lack any kind of customization, looking generic across all banks, and are therefore ripe for disruption. Cover Genius is responding by gathering transaction data and creating customized protection plans, based on data.
See also: Embedded Insurance Offers Don’t Repel Customers, They Attract Them
Chakraborty said FinTechs have two key advantages that put them in a good position to deliver embedded insurance. “They have convenience and trust, which are the main pillars for new banks, digital wallets and buy now, pay later platforms,” he said.
A good example of this is Cover Genius’ partnership with the ride-sharing firm Ola, which operates in India, the UK, Australia and New Zealand. With Ola, Cover Genius offers a ride protection program that covers people against things like losing a wallet or smartphone or being late to the airport and missing a flight.
“For example, for a passenger who has taken a cab ride, we curate a tailored protection plan that is relevant to that specific experience,” Chakraborty said. “With one click, a customer can purchase relevant protection, in a convenient way. For a brand like Ola, this builds trust as they are able to provide a service warranty directly to their customer.”
Cover Genius uses transaction data to perform countless optimizations for price and coverage, offering a product that’s suitable for end users and distribution partners. One such offering is the coverage that Cover Genius provides to Skyscanner, which allows customers to cancel their flight for medical reasons, such as COVID-19.
“They wanted assurance that, if for any reason they cannot fly, they would be able to cancel those tickets,” Chakraborty said, noting that this has become more important because of the pandemic. “We can give them flexibility by using our price optimization and coverage engines, which use AI to determine which products are most suitable and tailor them to the customer’s needs.
As embedded insurance becomes more common, eCommerce firms can leverage hyper-relevant customer protection as a product differentiator. Shopee, a leading eCommerce firm in Southeast Asia, has partnered with Cover Genius to provide coverage that goes beyond what’s available on the manufacturer’s warranty.
“When a customer buys any electronic goods, whether it’s a phone or a laptop, we are giving them accidental liquid and fire damage protection, which is not available under the warranty,” he said. “And, the buyer can opt in when they’re choosing to buy that phone or laptop.”
Read more: Carpe Datum: Banks Must Seize Data Advantage To Cross-Sell Insurance Or Get Left Behind
“Digital companies need to look at how they can create product differentiation. From there, they need to have more interactions with their customers and offer personalized protection to build engagement and trust, he added.”
Consumers have already made it clear that it’s something they want and need. According to a June PYMNTS survey, 44 percent of bank customers are highly interested in receiving at least one insurance offer from their bank that is relevant to their purchases and/or life events.
Read more: 60 Percent Of Typical Buyers Very Interested In Embedded Bank Insurance Offers
Chakraborty said that the demand is even higher when it comes to so-called “challenger banks” and buy now, pay later (BNPL) services, with up to 75 percent of their users interested.
“These people are looking for companies to leverage their transactional data to offer customized insurance that is suitable for their needs,” he said. “We have strong data across 13 markets that showcases why embedded insurance is going to be the future of insurance.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More