EMBEDDED INSURANCE
Though embedded insurance may not appear to consumers as a flashy new means of purchasing coverage , it ’ s not designed to be . In fact , the reason embedded insurance has become such a hot topic as a means of product distribution for insurers is due to its seamless integration with other associated insurance offerings , addressing both primary purchase and related insurance needs in one transaction .
Enabling customers to have a more comprehensive and holistic solution , embedded insurance flips the traditional model of offering insurance products , which requires consumers to actively seek coverage for standalone products . Effectively , it eliminates the need for customers to go through additional steps or fill out complex forms to obtain insurance .
Embedded insurance allows insurers to tap into new customer segments and leverage existing distribution channels of partner companies , all while gathering valuable data from customer transactions to create more personalised underwriting and pricing models . Although this paints a rosy picture for insurers , there are complex regulatory requirements to consider , giving some legacy institutions cold feet over offering packaged insurance products – and ensuring embedded products meet the licensing needs of all products in a single package is one consideration . Add to that the need for complex compensation algorithms for each embedded offering , compliant advertisement licensing , rebate cognizance and intellectual property law adherence , and it becomes clear that completely remodelling legacy models may be a pricey risk for established insurers .
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