Embedded insurance should be seen as a key tool to help e-commerce businesses improve their customer value proposition in a digital-focused future.
If you work in e-commerce you’ll know that the digital landscape for retail is constantly evolving.
With Amazon offering same-day delivery and disruptors like Klarna integrating ‘buy now pay later’ finance products into online checkouts, the market is hot with new innovations that offer speed and convenience.
But with the cost of living rising, reassurance and peace of mind have become just as valuable to e-commerce consumers. Embedded insurance is one way you can offer this to your audience, creating a better user experience as well as increasing revenue and brand loyalty.
So what exactly is embedded insurance?
You might think that you don’t know what embedded insurance is, but it’s simply a fancy technical term for something that’s hiding in plain sight throughout the ecommerce world.
Have you ever bought a flight or train ticket, and when you got to the check-out, there was an option to add cover, for a small add-on fee, that would refund your ticket if your journey was disrupted? Or what about when you buy a product and it has a warranty embedded in the price, so that if the item breaks or is faulty you are entitled to a refund?
These are both great examples of embedded insurance. It’s a simple way to increase the value that customers receive, as well as generating extra revenue. Brands can offer cheap, attractive insurance cover for undesirable eventualities as an add-on at check-out, or embed it further into their offering by including it in their prices.
Why Insurtech needs to be on your radar
At MIC Global, we believe that embedded insurance is a key differentiator that can help brands gain competitive advantage, increase brand loyalty and generate additional revenue.
If your business sells online, you might think that insurance has nothing to do with the products or services you sell to your customers. But if you do, you’re missing a trick.
With the cost of living rising, consumers appreciate peace of mind when making purchases more than ever. Embedding insurance products and warranties into your products or services will increase your customers’ loyalty to your brand.
And it’s not all about peace of mind and loyalty. ‘Insurance’ and ‘fun’ might not be words often seen together, but we see things a bit differently here at MIC. We love to get creative with our clients to help them offer cover to their customers that’s both useful and a fun talking point that will hold attention in a crowded market.
Reinventing the insurance industry
Smart doorbells is a great example. Not so long ago, smart doorbells were a hot new thing. Nowadays you see them on every street. But a smart doorbell that will refund you for any packages stolen from your porch? Consumers’ ears will perk up once more, and it’s easy to see why.
We partnered with a company that sells smart doorbells to create an insurance product that protected customers from package theft. In this case, the insurance cost was embedded into the price of the doorbell, so the cover was an additional benefit that encouraged customers to pick the product.
Before we partnered with this company, those smart doorbells allowed users to monitor their front porches, but they didn’t protect them from what happened on that porch – even though the doorbell gave them proof of wrongdoing. By protecting customers from the risk associated with the very product they were purchasing, our embedded insurance product was a great way to add value for both the company selling the doorbells and the customers buying them.
Speed is key in a fast-paced world
This isn’t a trend you want to miss out on. A recent article in InsurTech predicted that insurance products will soon be regularly offered during the purchase process or embedded seamlessly within the price throughout the e-commerce world. Megan Bingham-Walker wrote,
“When disaster strikes, the claims process will be as simple and rapid as possible; automation will accelerate much of the insurance process, with minimum human intervention, and products will default to the use of parametric triggers where possible.”
But how do you achieve this simple, rapid, automated claims process? There’s one puzzle piece missing, and that’s the mechanics of how you include embedded insurance in your offering.
The main reason why embedded insurance hasn’t already spread like wildfire throughout the ecommerce world is that it is a massively complex, time-consuming project. The necessary licenses must be obtained, underwriters hired, approval granted, legal structures set up and technology know-how utilised. It’s an investment of time, people, skills and money that many businesses can’t afford to make.
Anything but an afterthought
This is where MIC comes in. Embedded insurance is never an afterthought for us, because it’s what we do day in, day out. We sell simple embedded insurance through platform businesses, enabling them to provide simple insurance products to customers at the time they are thinking about taking the risk.
Speed is the name of the game in this business, and we have perfected it. We understand that paying claims as quickly as possible isn’t just about protecting your brand image; it makes a real difference to the lives of your customers. As part of our vision to help everyone bounce back swiftly, we work hard to ensure that our claims process is the fastest it can be. We’re proud that our claims are currently paid over ten times faster than the industry standard.
Today’s world is moving faster than ever. Where there used to be just a handful of challenger brands, today businesses across every sector must think fast to survive. MIC can help you stay ahead of the curve by integrating relevant, innovative, industry-shaping insurance products and policies into your e-commerce offering.
Ready to redefine the e-commerce world? Get in touch to learn more.
