The search for insurance begins online. More than 69 percent of insurance shoppers ran a search before making an appointment with a broker and more than 50 percent of searches are on a mobile device.
Consumers are increasingly comfortable with online insurance, so companies need to move away from sales and marketing only in a customer’s moment of need. Insurance needs to expand to find B2B2C channels and partners to add embedded experiences to purchases, such as adding travel insurance when buying a plane ticket. B2B2C experiences will allow insurance companies to offer the right products at the right time for easier sales. That means APIs are the new point-of-sale.
The embedded opportunity
Some heady estimates are putting the value of embedded insurance into the trillions of dollars worldwide. That may be overly enthusiastic but embedded insurance promises to make selling and servicing much easier and relatively cheaper for companies. It is an opportunity to reach customers in signature moments that make the insurance purchase almost irresistible and seamless to help elevate the customer experience. For marketing, it gives access to new segments and potential new revenue streams. It also means elevated customer experience and operational efficiencies.
It’s a 180-degree shift from a traditional insurance operating model. Most insurers run end-to-end DIY businesses with headquarters manufacturing products and regional offices focused on distribution and customer service. Embedded insurance is a shift in mindset with a focus on lifetime value (LTV). It’s a shared ownership of customer, product, and price, with a new operating model to attract the right partners. Product architecture needs to support fast-moving and short-term low premium products.
Creating an embedded ecosystem
Capgemini is already working with insurance providers to overcome the hurdles to embrace the embedded opportunity. This experience has shown that adoption can be hindered by:
- Unclear business value
- Lack of co-innovation experience
- Rigid, spaghetti, and slow architectures
- Data privacy and cybersecurity concerns
But the biggest hurdle is the API infrastructure required to create an embedded ecosystem that actually works. Capgemini’s open insurance platform accelerates the embedded journey so companies can see the value more quickly. With established methodologies and vision, the model ensures there is a robust product and API strategy to drive transformation. That means insurers build agility and security while driving more innovation and open APIs.
Building the right foundation
Insurers will need a robust platform to enable secure ecosystem integrations. Embedded models require a technology platform which exposes products and services that are then securely integrated into a partner’s customer journey over a set of APIs. The platform needs to be reliable and responsive so it works seamlessly 24/7. It must also be highly secure to protect the data exchange, safeguard intellectual property, and be easy for partners to develop on.
Conclusion
Tech shouldn’t impede embedded ambitions. Insurers are learning to move away from traditional agents and brokers to find more creative ways to attract new customer segments and value propositions. But they need to collaborate with larger ecosystems to connect in the right moments, those that lead to a new policy. B2B2C digital distribution will make insurance purchases convenient, and ultimately, irresistible. APIs are the new insurance agency and companies need to be ready.
