{"id":61298,"date":"2020-09-11T09:10:56","date_gmt":"2020-09-11T13:10:56","guid":{"rendered":"https:\/\/staging.majesco.com\/?p=61298"},"modified":"2024-05-09T13:45:15","modified_gmt":"2024-05-09T17:45:15","slug":"embedding-a-new-insurance-paradigm","status":"publish","type":"post","link":"https:\/\/staging.majesco.com\/?p=61298","title":{"rendered":"Embedding a New Insurance Paradigm"},"content":{"rendered":"\n

As I was preparing for our Labor Day family backyard cookout this last week, I made a trip to the grocery store to get the items on my list\u2026hamburgers, brats, buns, ketchup, chips, salads and the like. I started down the aisle (after sanitizing my cart, of course) and as I approached the meat case, I encountered a large and engaging display of Labor Day party essentials. It was on a raised platform, so it was impossible not to see it. It didn\u2019t just have stacks of grocery items with prices called out on signs. Instead, it was like a life-sized Labor Day cookout display, complete with a Weber grill, bag of charcoal, grilling utensils, paper plates and cups, bags of chips, soda bottles and a table with a red checkerboard tablecloth.<\/p>\n\n\n\n

It was a vision of a classic cookout experience. Underneath the display, the \u201cingredients\u201d of the experience \u2013 the chips, charcoal, plates, buns, etc. \u2013 were conveniently stacked, and just past the display, the refrigerated meat case prominently showcased a sale on ground beef, hot dogs and brats. My shopping list lined up pretty well with the items in the display and I quickly added them to my cart without having to snake through the aisles to find each one separately. But the display also reminded me that I needed a bag of charcoal\u2026not the most glamorous part of the cookout, but still an absolutely essential component to ensure its success! <\/p>\n\n\n\n

While the charcoal was a must-have, it wasn\u2019t top of mind and it didn\u2019t make my shopping list. I would have gotten home and realized I needed it as we were getting things ready, resulting in a frustrating second trip to the store. But the store made it easy for me to remember it \u2013 and buy it \u2013 because they embedded<\/em><\/strong> it in the Labor Day cookout experience that was illustrated in their display.  They essentially created an entire experience \u201cecosystem\u201d that included all the key ingredients I needed. All I had to do was put them in my cart and check out. This is an effective strategy to both increase sales and create a satisfying customer experience. In fact, a 2014 study of grocery store shoppers found that products placed in promotional displays like this were seen by nearly twice as many store visitors compared to products stacked in the inner aisles of the store.[i]<\/a>  Greater visibility, especially within the context of an engaging experience, greatly increases the chances of purchases.  <\/p>\n\n\n\n

And this strategy is not limited to just retailers.  Embedding insurance<\/strong> as part of another related offering is rapidly becoming a powerful marketing and distribution strategy, in effect removing insurance from the \u201cinner aisles\u201d and placing it in front of customers as they purchase other products or services.  In an SVIA webinar<\/a> I spoke at in August, we defined embedded insurance as a strategy that:<\/p>\n\n\n\n

\u201cBundles coverage or protections within the purchase of a product, service or platform. That means the insurance product is not sold to the customer ad hoc, but is instead provided as a native feature.\u201d<\/em><\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

It\u2019s an extremely effective way to overcome the decades-long burden that has plagued the industry: Insurance is sold, not bought. Embedded insurance<\/a> completely changes this paradigm. With it, insurance is no longer sold<\/em>, because it is bought<\/em> as a part of something else. \u00a0<\/p>\n\n\n\n

Ecosystems are Foundational for Embedded Insurance<\/strong><\/p>\n\n\n\n

An important driver of the shift to embedded insurance is the rise of ecosystems. Swiss Re\u2019s 2019 report, Digital ecosystems: extending the boundaries of value creation in insurance<\/em>, noted that ecosystems can be structured into broad clusters, such as \u201cHome & Stay\u201d and \u201cLifestyle\u201d on the B2C side, and \u201cBuild\/Produce\u201d and \u201cDeliver\u201d on the B2B side. Within these clusters, finer-grained domains can be defined, like \u201cMobility\u201d or \u201cTransport & Logistics.\u201d Insurance fits within the risk assessment, management and mitigation aspects of these ecosystem domains, including mobility \/ transportation, property \/ housing and health \/ wellness \/ wealth.<\/p>\n\n\n\n

In today\u2019s interconnected world, insurance must play within these ecosystems, rather than simply as an industry unto itself. This differs from today where, in order to get insurance, the customer must use existing, traditional insurance players (channels, insurers, MGAs, reinsurers, etc.). It represents a fundamental shift from inside-out to outside-in.<\/p>\n\n\n\n

As a result, insurers must reimagine the scope of what they offer to customers \u2013 to include not only the risk product, but also value-added services from a broad ecosystem and a compelling digital customer experience.  Those that act on this new view will see new, innovative and exciting new business opportunities that reach and engage customers when and how they want.   Here are some examples of companies \u2013 within and outside the industry – who are leading with an embedded strategy:<\/p>\n\n\n\n