Strategic collaborations are expected to surge in the embedded insurance space

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In today's world, consumers are more attracted to a hassle-free experience and thus, insurers are increasingly incorporating open APIs and other technological breakthroughs in their business models to provide a value-added, frictionless solution to the customers. This sophisticated process can be offered by embedded insurance, where customer grievances are addressed, at the same time creating a seamless experience. 

Since embedded insurance solutions have become one of the key strategies for companies to get an edge against other competitors in the market, more strategic partnerships are witnessed in the embedded insurance space. For instance,

• In September 2022, NEXT Insurance, a key digital insurtech, partnered with Intuit Inc., an American financial software provider, to announce the launch of NEXT Connect, an embedded insurance solution for Intuit QuickBooks. Notably, QuickBooks is an accounting software developed by Intuit that enables small and medium-sized businesses to offer on-premises accounting solutions. Together with this, QuickBooks also provides cloud-based versions to accept business payments, help manage bills, and other payroll functions.

Under this partnership, these small businesses and accountants will be able to access insurance quotations and customized coverage within their QuickBooks accounts. Apart from this, these businesses will benefit from NEXT's proprietary pay-as-you-go product, which helps in providing workers’ compensation. Additionally, the users of the solution will also get consultations from trusted insurance advisors as well as will be able to access multiple national carrier products, including NEXT. Importantly, the pay-as-you-go offering provides these businesses a convenient option to pay for their insurance upfront, helping them preserve their cash flow. Because of the partnership, the pay-as-you-go system gets integrated with Intuit QuickBooks, and thus, the embedded insurance solution can help these small businesses to prepare a relevant plan for easy payments, at the same time ensuring payments needed only for the insurance coverage.

NEXT came up with this embedded solution as most small businesses in the United States have been offered the same financial services and insurance solutions instead of customized ones. Also, their business operations have been affected by increasing inflation and interest rates, which is also taken care of by NEXT Connect. This new embedded insurance helps small businesses save money and time by bundling their insurance policies and purchasing the exact insurance coverage they need. 

Consequently, PayNXT360 projects that in a time of economic uncertainty, with its innovative products, NEXT will attract many small businesses to easily access tailor-made insurance coverage and offer payments tied to the company's payroll for their employees' compensation policies.

• Similarly, in September 2022, another partnership was formed between eBaoTech Corporation (eBaoTech) and Ageas Group (Ageas) in the embedded insurance space. eBaoTech, which is a digital platform catering to the insurance industry, has a product called InsureMO, an insurance PaaS (Platform-as-a-service) platform. Now, this InsureMO will enable Ageas to see growth through B2B2C channels as a tech enabler for embedded insurance offerings. Therefore, this partnership will improve its systems and operational efficiency and bring new-age technological capabilities to its business model.

InsureMO or Insurance Middle Office helps in bringing innovation in insurance, at the same time, helps in managing the massive volume of insurance business in this digital era. This platform, which has an array of insurance APIs and microservices for general, life and health insurance businesses, also supports Open API collaboration. This partnership, for Ageas, is basically a part of its digital strategy to improve its time-to-market capabilities, thereby bringing scalability to its business.

• Embedded insurance is very common for vehicle companies. In August 2022, a vehicle subscription provider, Autonomy, partnered with DigiSure, to provide embedded insurance for vehicle subscriptions. Notably, DigiSure is a software firm that deals with screening, insurance management and claims for vehicle and vehicle sharing platforms, which will enable Autonomy to digitally onboard and qualify a subscriber for month-to-month auto coverage. Autonomy, which basically prioritizes providing easy and affordable access to electric vehicles, helps vehicle subscriptions to scale profitably. Therefore, with the rise in demand for electric vehicles, PayNXT360 expects more such innovative partnerships to be observed in this space to make them more financially accessible.
• Another unique partnership was formed in the embedded insurance space aiming to bring financial inclusion to non-permanent factory workers of India in August 2022. An insurtech start-up, Bimaplan announced a partnership with Niyo Bharat, a prepaid card platform to enable contractual factory workers to access insurance products. Through Bimaplan's embedded insurance platform, UNO, the process of buying the insurance policy through the Niyo Bharat app will get easier as here the app directly deducts the premium from the customer's savings account. Therefore, this API integration and tailor-made low premium plans will make insurance products easily accessible to these contractual workers.

Post partnership, Niyo Bharat, which provides contractual workers with digital financial products, will be able to offer relevant insurance plans to its customers. Apart from low monthly premiums, Niyo Bharat will also now offer unlimited teleconsultation service, financial support for short hospital trips, and health insurance coverage of INR 50,000. Therefore, PayNXT360 expects this unique partnership will not only help in improving the financial wellness of contractual workers but also help in generating revenue for both parties over the long run.

Notably, from the global point of view, Asia-Pacific has the biggest market for embedded insurance products. A growing number of Indians are interested in receiving embedded insurance products directly from their banks. Since embedded insurance has the potential to boost insurance penetration rate in India, more and more players are entering the segment. For instance,

• India-based insurtech start-up, Symbo, dived into the embedded insurance space after using data pools to understand potential customer behavior and underwriting risks. The platform basically engages with its partners and provides products as per clients' requirements and also helps in structuring their insurance plans.

Symbo sold around 90,000 embedded insurance policies in December 2021, which increased further to around 150,000 in March 2022. The platform, which has clients such as Redtape, Decathlon and more, has been witnessing sequential growth of around 15%. Now the company intends to explore other markets also such as, large ecommerce companies and start-ups to design tailor-made insurance products.

To know more and gain deeper understanding of the global embedded finance market, click here.