Imagine booking a cab and you get to insure yourself against any adventure activity that you take up in the future. Fascinating, isn’t it? This is exactly what embedded insurance is offering you. In another instance, you can also choose to ensure your smartphone is under device insurance. This was something that was probably unthinkable a decade back. The entire goal of embedded insurance is basically to offer seamless and convenient coverage which will be helpful in meeting specific needs without requiring any separate transactions.
Now, consider these instances in the Indian insurance industry- fascinating as well as profitable! In fact, a recent report highlights that- India’s embedded finance industry is expected to grow annually by 46% while reaching a whopping INR 1,61,442 crore by 2029. Keep reading to decode more.
Understanding the Increasing Popularity of Embedded Insurance in India
With its immense scope in the Indian insurance industry, embedded insurance is significantly gaining momentum, here are the key ways to understand the increasing popularity of Embedded insurance in India:
Targeted Coverage
Traditional insurance products often come with broad coverage which essentially might not serve its purpose to each unique customer. However, Embedded insurance allows for more targeted and specific coverage, which makes it even more cost-effective and appealing.
Increased Digital Adoption
This is another one of the significant reasons for the popularity of embedded insurance in India. The pandemic has significantly played an important role in accelerating the digitization of various sectors, including insurance. With the customers engaging in online transactions, the opportunity which lies ahead for embedded insurance into these digital journeys has significantly shot up and also enables insurers to invest in insurance technology that effortlessly blends with these insurance products.
Improved Customer Experience
With the integration of insurance into everyday transactions, customers can significantly expect a more streamlined and hassle-free experience. This is especially true when it comes to the growing number of younger demographics who mostly prefer digital-first solutions because of their convenience and personalization.
Closing the Protection Gap
India has a significant amount of protection gap, with many individuals and businesses who are uninsured. This is the gap which is not only because of affordability but also accessibility. Not only does it stem from issues like trust in insurers, customer education, and awareness followed by cultural factors. This is exactly where embedded insurance comes into the equation, helping significantly in bridging the gap between offering affordable and more accessible coverage options.
What are the Key Benefits for Insurers and Partners?
General insurers are at the brink of an industry win with Embedded insurance’s popularity which would help them rapidly achieve the goal of Insurance for All by 2047.
Here’s what lies ahead for General Insurers:
Increased Penetration
With Embedded insurance being integrated into everyday platforms, significantly helping in reaching the untapped segments, especially in underserved and rural regions.
Improved Risk Management
Real-time data and contextual coverage through embedded models help enhance risk visibility and enable proactive decision-making.
Access and Own New Markets
By identifying emerging risks early and delivering tailored protection, insurers can capture niche markets and build a long-term competitive edge.
Decoding the Successful Embedded Insurance
Insurers are truly leading Embedded insurance and have one thing in common- a Digital-first approach. They pioneer in offering insurance at scale through truly digital ecosystems. The traditional manpower-heavy approaches are no longer grinding the business but rather becoming obsolete. This move significantly urges the insurers to embrace a comprehensive digital strategy that includes:
Real-time Data Analytics
Using real-time insights for personalizing the offerings and delivering contextually relevant products that are based on customer behavior and market signals.
Seamless Data Integration with Digital Platforms
Embedded insurance within e-commerce, Travel, and Fintech ecosystems use an API-first approach for effortless third-party integration.
Automated Underwriting and Claims
Implementing technology solutions that support straight-through processing and smart workflows significantly helps drive speed, accuracy, and efficiency in core operations.
Cloud Native, Low-Code Delivery
Launching products has become much easier and incredibly short, literally in weeks rather than months. Additionally, using a low-code, no-code platform without any disruptive overhauls further simplifies product launches.
Superior Customer Experience
Designing experiences that offer clarity, simplicity, and responsiveness and ensure a seamless user journey followed by timely support.
Why the Future of Embedded Insurance in India Looks Bright?
The future of embedded insurance in India looks bright due to multiple factors the most crucial being the rise of the tech-savvy population. By integrating Embedded insurance with everyday operations, the insurers can offer a personalized, cost-effective, and convenient way for the customers to access coverage. This approach significantly benefits insurers by reducing distribution costs and also expanding their reach, creating an era for increased insurance uptake.
