To delve into the evolution of the embedded insurance market, we'll begin by examining the key insights within a specific sector. This approach will allow us to understand the transformative impacts of embedded insurance in a focused manner. Subsequently, we will go deep in our discussion to cover the global embedded insurance market. This market is on a trajectory of high growth, with projections suggesting extensive growth across various regions and sectors up to the year 2030. 

1 . What is Embedded Insurance?

Embedded insurance is a model where insurance products are integrated into the purchase process or platform of another product or service. This approach allows customers to buy insurance coverage at the point of sale or within the context of another transaction, making the process seamless and more convenient. For example, when buying a car, travel tickets, or even electronic gadgets online, you might be offered relevant insurance coverage (like auto insurance, travel insurance, or extended warranty) directly in the checkout process.

This model benefits both consumers and businesses. Consumers enjoy a more convenient and streamlined process to secure insurance coverage that's directly relevant to their purchase, often with simplified underwriting and immediate coverage. Businesses, on the other hand, can increase customer satisfaction, differentiate their offerings, and potentially generate additional revenue through partnerships with insurance providers.

Embedded insurance leverages the growing digital ecosystem and the ease of integrating services through APIs (Application Programming Interfaces), allowing for real-time data exchange and the automation of the insurance offering and purchasing process. This trend is part of a broader movement towards embedded finance, which seeks to integrate financial services into non-financial platforms and ecosystems seamlessly.

2 . Example: Embedded Insurance in Retail

Embedded insurance integrates insurance offerings directly into the purchase process of a product or service. For eCommerce, this means customers can buy insurance for their purchases at the point of checkout. This practice is increasingly popular due to its convenience and the added value it provides to both consumers and retailers.

Growth Potential and Consumer Interest

• Consumer Demand: The study indicates that nearly half (48%) of consumers would be more inclined to make eCommerce purchases if insurance coverage was offered at checkout. This demonstrates a significant interest in embedded insurance among online shoppers.

The Role of Extended Warranties

• Most Common Offer: Extended warranties are the most prevalent form of embedded insurance offered in eCommerce. They cover products beyond the standard warranty period, addressing concerns like defects or malfunctions.

Impact on Consumer Behavior

• Increased Spending: Offering insurance at checkout not only encourages more purchases but also influences customers to spend more. The data shows a substantial percentage of consumers are willing to pay more for their purchases if insurance options are available.

Trust and Preference for Retailer-Provided Insurance

• Trust in Retailers: A significant finding is that consumers prefer to purchase insurance directly from the retailers they are buying products from, rather than third-party insurers. This trust factor is crucial for retailers considering offering insurance.

Type of Products and Insurance Uptake

• Product Value and Type Influence: The likelihood of consumers purchasing insurance varies with the type of product and its value. High-value items and specific categories like motor vehicles and electronics see higher rates of insurance uptake.

Conclusion and Opportunities for Retailers

• Revenue and Customer Loyalty: By not offering insurance, retailers miss out on potential revenue boosts and opportunities to enhance customer loyalty. The study underscores that even the mere option of insurance can positively affect consumer spending habits.

Step-by-Step for Retailers

1. Evaluate the Demand: Understand that a significant portion of your online customers value the option of insurance at checkout.
2. Consider Extended Warranties: Recognize that extended warranties are a popular and familiar form of insurance for many consumers.
3. Assess Your Product Range: Determine which products in your inventory could benefit most from embedded insurance options, focusing on high-value and electronics categories.
4. Build Trust: Offer insurance directly as part of the checkout process to leverage the trust customers have in buying from you.
5. Implement and Test: Start by introducing insurance options for products where interest is likely to be highest. Collect data on how it affects purchasing behavior and adjust your offerings based on consumer feedback and sales data.

Back to top

3 . Global Embedded Insurance Market Overview (2023-2030)

• Total Embedded Insurance Market Value (2023): $78.69 billion in premiums
• Projected Market Value (2030): $175.22 billion
• Compound Annual Growth Rate (CAGR): 11.63%

Regional Insights

1. North America

   • 2023 Value: $16.71 billion
   • 2030 Forecast: $35.19 billion
   • CAGR: 11.02%

2. Asia-Pacific

   • 2023 Value: $30.34 billion
   • 2030 Forecast: $67.65 billion
   • CAGR: 11.45%

Sector-Specific Growth: Travel and Hospitality

• 2023 Value: $18.81 billion
• 2030 Forecast: $37.05 billion
• CAGR: 9.67%

Back to top

4 . Leading Companies in the Embedded Insurance Market

The embedded insurance sector is dominated by key global companies such as Travelers Insurance, Cover Genius, Metromile, Qover, Hokodo Services, ELEMENT Insurance, Bsurance, Simplesurance, and Kasko. In 2023, the market was significantly concentrated, with the top three vendors accounting for approximately 34.32% of the premium revenue.