Embedded insurance transforms the paper-based insurance value chain into digital form, enabling non-insurer third parties to integrate insurance products into their platforms. With the global digital insurance market set to reach US$169 billion in value by 2026, it’s a Value Added Service e-commerce platforms should offer at the top of their home page.

In 2020 consumers  moved to buying almost everything online from gadgets and appliances to cars, homes and travel packages (the latter sector is expected to soar as lockdown restrictions ease). For all of these things, consumers need insurance cover. 

So why send them away from your e-commerce platform to buy insurance, post-purchase, directly from a bank or insurer? More than 60% of online shoppers surveyed would purchase insurance coverage for their purchases if given that option at check-out. And there are wider opportunities, across different types of e-commerce platforms:

If you have any of these platforms, we have your solution

By integrating our white-label embedded insurance SaaS, and partnering with a licensed underwriter, you can offer consumers digital insurance from your home page – and via all of your digital consumer touchpoints.

Our developers can create an “omnichannel” insurance model for you, making it marketable and accessible on your website but also via social media, on WhatsApp, SMS – you name it. We thread the offering into every possible digital consumer touch point.

 Because we make policy take-up quick and painless with just a few clicks, the rate of take-up is usually robust (no more painstaking paperwork, or consultation with a call centre agent, required). As more customers sign up for your insurance product, your ecommerce business will benefit in three ways:

Increased Customer Lifetime Value (LTV)

Insurance is not really something you would call “sexy” but our cloud software “glams up” the traditional insurance model by offering customers digital insurance in real-time, fast and effortlessly. And every new policy taken out will glue that customer a little bit more tightly to your business, with first-time customers more likely to become repeat customers and regular customers more likely to buy more from you (research from PYMNTS suggests that 58% of e-commerce consumers are more likely to buy retail products, or spend more on them, if insurance is offered at the point of sale).

A perpetual new revenue stream

  • The higher the cost of a purchase, the more logical it is that the consumer will opt for insurance cover –  ecommerce platforms selling high-ticket products like appliances; computers; jewellery, motorbikes and cars, take note.
  • Meanwhile, offering insurance on lower-priced products subconsciously increases their value in the consumer’s eyes – potentially turning purchase consideration into an actual purchase.

A common type of insurance taken up at point of sale is the extended warranty; making this a logical place for online retailers, and OEMs, to dip their toe into the insurtech water. 

The premiums on policies give e-commerce platforms a previously untapped revenue stream that will grow in tandem with the continued growth in e-commerce. While the revenue is shared with the underwriter, e-commerce platforms still benefit from an incremental revenue stream that more than pays for the initial investment in it.

Deeper insight into consumer behaviour

By switching on embedded insurance, your customer-related data will become richer and more integrated across inventory, orders, sales and after-sales. This aggregation of “big data” will enable you to do various things: assess risk, predict future customer behaviour, and cross-sell relevant value added service or products to your policy-holding customers, directly, through the Customer Portal we will create. This ability to offer more personalised engagement to consumers will increase consumer loyalty, and, ultimately, your overall revenue.

Are there challenges to implementation?

Implementation should be a smooth process. The e-commerce space is usually the easiest place for us to implement our insurtech solution because eCommerce platforms are already digitally-led. To address the two main concerns raised with us before:

  • “What about business disruption?”: Implementation may be a little bit more complicated if you are still using siloed and outdated “legacy” business systems, rather than cloud-based systems like SAP or Oracle. It would require a bit of work in-house, to enable holistic integration of the insurance product and consolidation of different departments onto a platform; but most of the work will lie with us.
    We also plan implementations in phases, meaning minimal disruption to your day-to-day operations.
  • “We have cost concerns”: There will be an implementation cost, but the return on investment will briskly become apparent in three ways. Firstly, the embedded insurance product is enabled through Software as a Service (SaaS), a subscription-based service incurring no up-front licence; secondly, you won’t have to buy additional hardware to use Click2Sure; thirdly, the revenue accruing from premiums will ultimately outpace what you’ve spent – and it will be perpetual. 

The bottom line

If you sell laptops or sports goods, the idea of launching an embedded insurance offer may feel new, and you may want more time to mull it over. It’s human nature not to invest in something until you see other companies in your sector doing so first.

At the same time as you’re mulling it over, so are the traditional banks and insurers, who see the widespread convergence of e-commerce and insurance as inevitable – but also as an opportunity to themselves move into new territories  – like your e-commerce platform – in order to grow their own customer base.

Remember that being an early adopter is often the best way to leapfrog more timid competitors – and the clock is ticking. Amazon has already invested significantly in this space, meaning that smaller e-commerce platforms simply must follow its lead to remain relevant. Be one of the first in SA.

Embedded insurance is a unique opportunity to outpace your online competitors in 2022 and beyond.  Get in touch with our team to discuss first steps: