EXECUTIVE INSIGHT
Q . WE ’ RE SEEING MORE FINANCIAL SERVICES FIRMS INTEGRATING INSURANCE INTO THEIR OFFERINGS . WHAT DO YOU THINK ARE THE KEY BENEFITS AND HOW CAN THEY BEST POSITION THEMSELVES TO CAPTURE THIS MARKET ?
» Embedded insurance is really changing the game for financial services firms , from fintechs and neobanks to more traditional players like banks and credit unions . As consumers , we ’ ve come to expect more seamless , connected experiences , whether we ’ re shopping online or managing our finances . Embedded insurance taps into that trend by integrating coverage directly into the customer journey , either as part of a bank account or card offering , or even at the point of transaction , like when you ’ re booking travel or making a big purchase . It becomes a natural part of the product , adding value without any extra steps for the customer .
For financial services firms , embedding insurance into accounts or credit cards means they can provide a more comprehensive package , enhancing customer value from day one . For instance , imagine a credit card that includes travel insurance . This feature not only makes the card more attractive but also encourages customers to use it for travel-related expenses , knowing they ’ re protected . On the other hand , offering insurance at the point of transaction allows them to capture customer interest exactly when they need it most , driving better conversion rates and stronger relationships .
“ By simplifying the process and offering more tailored coverage , embedded insurance can help reduce the barriers to entry ”
But beyond boosting revenue , embedded insurance also has the potential to influence customer behaviour , encouraging clients to engage differently with their bank , whether by increasing card usage or upgrading their account for additional coverage .
Moreover , financial services firms can improve more than just revenue targets by incorporating insurance , they can focus on reducing customer acquisition costs , increasing retention , and deepening customer relationships . Insurance integration can act as a differentiator , positioning financial services firms as more than just transactional entities but rather as holistic service providers that meet diverse customer needs .
From the customer ’ s perspective , this approach simplifies everything . It ’ s more flexible and tailored , adapting to their changing needs and preferences . The seamless integration aligns with the demand for digital , on-demand services , making insurance feel more accessible , transparent , and relevant .
38 November 2024