AIICO Insurance Plc said it has strategised to take the lead in enhancing customers experience and satisfaction through the embedded insurance concept which is presently transforming underwriting practice.
Embedded insurance, which is presently gaining traction across the globe, according to experts, has the potential to grow into a trillion-dollar market.
AIICO Insurance said as a forward-looking underwriting firm, it has signed partnerships with two firms to drive the concept.
According to its Divisional Head, Shared Services, Olusanjo Shodimu, the firm is enlarging its frontiers in the retail market space through the embedded insurance concept.
“We have adopted two approaches to managing micro insurance. What we are doing is seeking partnership by identifying people operating within the space of business we want to do. There is a new concept called embedded insurance, that is partnering people with large customer base and putting insurance on their platforms,” he said.
According to global reinsurance expert Munich Re, embedded insurance has grown out of simple device protection and warranty products to more complex motor insurance coverage; and is expected to develop even further into other lines of business once data privacy concerns have been resolved.
Munich Re has identified the underlying digital processes of embedded insurance as strategically important and has therefore implemented many of the underlying tech trends with its product expertise. As part of our consulting expertise, we pass on this added value directly to our clients in the form of solutions such as fully API-driven automated underwriting, portfolio analysis or via our Insurance Analytics Marketplace”, the global reinsurer said.
It further said embedded insurance sounds like a logical and simple next step in digitalisation but in reality, it is a massive change within the business model.
“If products are offered together with insurance coverage for them, then insurers with product expertise will be able to offer customers a great deal of added value”, it said..
Continuing on the concept, Munic Re said: “Offering risk protection when purchasing a product or service like a car, mobile phone, vacation, or even an event cancellation like a concert has been commonplace for years. Previously, there was insurance on the product, but the technology behind it was not integrated”.
We now call this the B2B2C business model “Embedded Insurance” (EI) since the insurer as well as business partner is becoming more tech-savvy and products and protections are now being offered in a single and seamless journey. Insurers need to have a dedicated organisation and have to own a modern, evolutionary IT architecture to be able to partner successfully with OEMs, retailers, telcos, etc. Most importantly, they need to best serve the insured, not only during automated quote and policy issuance but also in case of a loss. Technical integration is of enormous importance in the sale of policies and also in the recording of claims in order to keep the costs of requests and processing fair and as low as possible”, it said.
On its advantages, the global reinsurer said it is beneficial to the insured, business partners and even to the insurers.
For the insurer it said, “being protected without any hassle. Does it make more sense having to call your insurance agent and remaining unprotected until the policy is signed a few days later or becoming seamlessly protected in seconds without resharing data like name, address and payment details?
For the business partner, it said partners generate additional income when selling risk protection with their product or service. “The insurance coverage option can also increase the purchase rate, since the customer no longer has a loss risk. Insurers with embedded insurance technology (millisecond-fast APIs, messaging, computer vision, etc.) enable cost efficient operations for the business partner.