A special type of insurance, outlined here, allows non-insurance companies to enter the insurance space without an insurance license. Now, our cloud technology is making it both easier and more profitable to do so.
Against the uncertainty of a global pandemic, insurance has become more important and relevant to many. At the same time, market research shows that pandemic-weary consumers are responding to brands that show them empathy and care. For these reasons more non-insurers, from national retailers to lifestyle brands – are entering the insurance space (like beer giant Budweiser, which will soon be telling Canadians “Bud’s got your back” through Budweiser Insurance). Such offerings are a way to both enhance the customer relationship and create a new revenue stream.
So, how do they do it? The same way you can; via a “cell captive” insurance partnership.
The first thing you would do is to join forces with an insurer holding a cell captive insurance license (we can help with that). With such a license, the insurer is able to create independent business entities or “cells” on its books, separate from the rest of its business. As a non-insurer/affinity partner, you can purchase special shares in a cell, allowing you to offer insurance to your customers in partnership with the insurer. There are other ways to launch an insurance offering – but they either require significantly more upfront capital or have complicated application and qualification requirements.
Four reasons to partner with a cell captive insurer
- By investing into the insurer’s cell, you can leverage their existing insurer’s license; no need to have one yourself.
- In your new partnership, the insurer will be responsible for ensuring that all legal/compliance requirements are met, meaning you can avoid that administration-heavy challenge.
- The insurer will underwrite your customers’ policies and either handle or outsource the administration of the policies (claim procedures/payouts, bordereau reports, etc.).
- The cell captive model allows you to create customised insurance (like Budweiser’s)
at a modest investment level and with a high degree of flexibility.
There’s just one big problem …
In order to start offering insurance to your customers, you have two options – either you must become FAIS-compliant yourself, which is onerous – or you can outsource to a FAIS-compliant brokerage to sell insurance on your behalf. That’s do-able, and you’ll be ready to roll – but it means there will now be three parties sharing in the revenue that comes from your insurance product – the insurer, yourself as the affinity partner, and the insurance brokerage.
There might even be a fourth party. You see, some insurers don’t want to handle the administration of the policies from their captive cells – their core business is already enough work – so they outsource to a managing general agent (MGA) or underwriting management agency (UMA), an independent business equipped to take on insurers’ administration workload.
With the insurer, the brokerage and a MGA or UMA all crowded around the table, you may end up walking away with just 10% of the revenue generated by “your” insurance product. That’s not ideal – and that’s where we come in.
… Which we solve.
Here’s how to reverse the shrinking size of your pie slice.
Click2Sure implements tried-and-tested insurance software which enables affinity partners to easily do the administration work of an insurer or MGA/UMA in-house – and automates a good portion of it. More details of how it works here. With our technology live on your system, the need for the insurer or its outsourced resource to do and charge for administration falls away.
More good news: we can also do away with the brokerage. Our software enables the distribution of insurance offerings through a digital omni channel approach via web/mobi, Ecommerce, QR Codes, Whatsapp, chatbots or SMS (it’s called Embedded Insurance and it’s a game-changer for non-insurers).
Regulation-wise, since this technology only makes insurance indirectly available and accessible to consumers, via a largely-automated “self-service” approach, rather than directly selling it to them as a broker would, the need for FAIS-compliance falls away.
There’s another reason to deploy our solution: your customers
Research shows that consumers are not only more interested in insurance these days; they also want it presented to them in a different way from traditional insurance. In the digitally-connected world, they want insurance to be as fast, accessible and available to them as the latest streaming hit or podcast.
Our Click2Sure solution does away with the old model of insurance – painstaking paperwork, dealing with human brokers or even a call centre, and very little customer-centricity – making insurance easy, friendly and on-the-go. The result: delighted customers and a higher rate of policy take-up.
The cell captive structure is the best way for non-insurers to enter the insurance space. With our technology added to the mix, it’s also the most cost-saving and effective way to do so. You’ll love the simplicity it brings to insurance, and your customers will appreciate the convenience.
If you’re a retailer or lifestyle brand, contact us to get the ball rolling – we’ll put you in touch with an insurance partner. If you’re an insurer, insurance brokerage, MGA or UMA looking to digitise and modernise the way you do insurance, we can help with that too.
Call +27 (10) 045 4019 or drop us a message at firstname.lastname@example.org. We can have your solution live in 30 days!