Open & Embedded Insurance Observatory Newsletter
Hi,
As a valuable member of our network we are happy to share with you our monthly newsletter, featuring our insights on Open and Embedded Insurance and the most interesting content that caught our eyes.
Key Facts
Insurance has one of the highest estimated costs of customer acquisition of any industry. Across all industries, the estimated cost of acquiring a new customer is five times the cost of retaining an existing one. In insurance, however, acquisition is seven to nine times more expensive than retention — between $487 and $900 per customer, writes Sean Harper, cofounder and CEO at Kin Insurance. Convincing new customers to buy coverage is expensive. Customer acquisition costs (CAC) have a direct impact on a carrier’s bottom line. Because customer acquisition costs are so closely tied to the bottom line, addressing them has a profound impact on an insurance company’s business goals. Embedded insurance can help fill the coverage gap while making customer acquisition resources more efficient. Embedded coverage offers a way for insurers to directly address their bottom line while also providing the streamlined, personalized insurance experience customers expect. (read more)
We can define a “business ecosystem” as an interconnected system, where companies, people, capabilities, and devices are combined and connected to create something (e.g. engagements or capabilities) that is much greater than the ecosystem’s individual parts. Being part of a business ecosystem means that most of the participants will create value. Customers come to the ecosystem through one entry point and then enjoy a continuously evolving end-to-end personalized experience. It’s simple and hassle-free for the customer and empowering for each individual partner too. (read more)
Stripe, a financial infrastructure platform for businesses, today launched the Stripe Partner Ecosystem, a new partner program with leading firms whose services enable Stripe users to thrive in the internet economy. The program makes it easier for companies to connect with the right partners for their specific objectives. Longtime Stripe partners taking part include thousands of companies powering the internet economy, like BigCommerce, Lightspeed Commerce, Shopify, Squarespace, Wix, WooCommerce, and Xero. Note that there is no insurance or insurtech company in the Stripe partner ecosystem. (read more)
A catch-up between RGAX and Samarth Shekhar of SixThirty Ventures on embedded life insurance. (read more)
A selection of the new embedded insurance partnerships:
Open & BUPA in the area of digital embedded health insurance.
Hiscox & Livlet in the area of homeowners insurance.
SMINNO & hepster in the area of insurance and smart two-wheeler mobility.
AON & PayPal in the area of SME insurance.
Insights
With the mobility market progressively moving from an ownership model towards a usage/subscription-based model, motor insurance will progressively be embedded into the subscription package and will become “invisible”.
The Telepass case
Who is Telepass: Telepass is the main processor of electronic toll payments on Italy’s highways, with 6.6M subscribers in 2020.
Telepass Pay. Launched in 2017, 550,000 subscribers (2020). 21% Telepass revenues come from Non-Tolling services.
The Telepass insurance venture. In 2019 Telepass launched Telepass Broker, a brokerage service that, using Telepass data offers insurance products to Telepass customers. In the first 8 months of 2020 Telepass broker sold over 10,000 TPL motor insurance policies to its customers. Insurance is a meaningful adjacent service for Telepass, as they can achieve a competitive advantage by using the tolling (over 700M toll transactions processed per year) and TelepassPay data to build tailored products for their customers, like they did in 2021 when launched a parametric insurance in partnership with Generali to reimburse up to 50% of the cost of the tolling in case of a delay caused by an accident. Business model of Telepass Broker: With subscriber’s consent, Telepass Boker can check when their policies are up for renewal and offer them a new one. For this brokerage service Telepass boker earns a fee equal to a percentage of the premium. For its insurance business Telepass collaborates with main insurance providers like Zurich Connect, Quixa, Genertel, Great Lakes (Munich Re).
Our selection of the latest researches
The Carevoice, a leading health insurtech company in Asia and member of our observatory, released the white paper Embedded Health: The Next Growth Frontier for Insurance. Topics covered:
Evolution of embedded health
The digital health services market
The market opportunity for insurers
Business cases of early movers
Capabilities needed for success
Link to download the paper —> https://whitepaper.thecarevoice.com/embeddedhealth
Following the first edition in 2020, Munich Re’s Global Consulting launched the second Pricing and Analytics Survey, addressed to P&C insurers in the European market. The survey is centred around the topics of: External Data, Prediction, Decision Making and Software & Technology. The survey aims at providing a comprehensive picture of current industry standards and trends.
Link to download the research —> https://www.munichre.com/en/solutions/reinsurance-property-casualty/global-consulting/pricing-consulting/pricing-survey-2022.html#1566144358
New members
This month we welcome four new members in the Observatory:
Insurely, was founded in 2018 with the aim of making the insurance industry open and obvious. To become a real game-changer for both provider and holder. With their platform and products, Insurely is creating win-win insurance experiences with open data. They offer consumers an understanding of insurance to make better choices, and help their partners in understanding their customers to increase conversion and satisfaction.
Nimbla uses leading algorithms to assess the risk on invoices. They use leading indicators to give real time prices to protect against customer defaults. Nimbla also empowers sales team to extend more credit lines to new and existing customers and offer more competitive credit terms.
InsureQ is a Munich-based InsureTech and consist of a fast-growing team of insurance, tech and product experts. Their vision is to simplify commercial insurance for SME, startups and freelancers and to digitally tailor the insurance cover to specific industry and professional requirements. Investors such as Nauta Capital and Rocket Internet share and support this vision. Risk carriers of their products are established insurers like Hiscox, ARAG and R+V.
Cober.io is a Spanish insurtech startup on a mission to protect eCommerce and help them make more money through Embedded Insurance
The Open & Embedded Insurance Observatory is supported by: Admiral, Ass.ni Generali, Barclays, BlaBlaCar, Blink-CPP Group, Bolttech, Boost, Cober.io, Codat, Cover Genius, DAI-ICHi LIFE, Element, Finansystech, Hiscox, Insurely, InsureQ, iNube Solutions, Kangaroo, Kanopi, Kayna, LAMIE, Mia Platform, Munich Re, Nimbla, Open, Otonomi, Penni.io, Planck, Reale Mutua, Sapiens, SAS, Sollers, Superscript, Talage, Techengines, Techpoint Servis, The Carevoice, tigerlab, Verso Finance, Wakam, Yolo, Zhong An Tech.