Why Embedded Insurance Strategies Need Innovative InsurTech Solutions
Long resistant to technological change, the insurance industry has made great strides over the last decade to implement innovative InsurTech solutions that upend longstanding market practices. As insurance providers explore new strategies for attracting a new generation of customers, they continue to rely heavily upon InsurTech developers to build the solutions that help them expand their customer base.
The Insurance Industry’s “Protection Gap”
Today’s insurance companies are offering more products and services than ever before, and yet at the same time, most people are carrying less insurance they need to protect themselves from risk. This “protection gap” is at least partially the result of large amounts of friction when it comes to purchasing insurance. People are either choosing to not buy insurance products, or they don’t know what options are available to them.
Part of this problem is the result of outdated models many organizations use to sell insurance. There’s an old adage that insurance is something that is “sold” rather than something that is “bought.” In this model, customers are expected to interact with an insurance agent who actively sells them a particular coverage.
Unfortunately, this model is becoming less and less effective in an increasingly digitized world, especially when it comes to younger generations of customers who expect the same level of frictionless convenience from insurers that they now get from many financial services (especially those powered by FinTech solutions).
What Is Embedded Insurance?
One potential solution to this challenge is a new strategy known as embedded insurance. This approach first identifies purchases or situations where insurance is required or would present clear added value. Some examples could include the purchase of an automobile, a vacation package, or even a potentially hazardous activity like skiing. An appropriately risk-adjusted insurance package is then offered to customers at the point of sale, or “embedded” within the customer experience.
There are tremendous advantages to this strategy. In the first place, it allows insurers to offer their products to customers who need them most at the precise point when they need them. Rather than having to go through the laborious process of contacting an insurance agent to get a quote for a new automotive policy after someone buys a new car, they can simply update their plan or add insurance services at the same time they’re purchasing the car itself. Customers are less likely to put off getting insurance (and then often forgetting to do so later), and the insurance provider has an opportunity to offer services to the people most likely to purchase them. For the provider, it’s a much more efficient approach than relying on outdated cold calling techniques to sell policies that may or may not meet the current needs of a customer.
Technical Challenges of Embedded Insurance
In order to embed insurance offerings effectively, however, providers first need to overcome a few technology challenges. From improved data capture tools that allow them to conduct faster, more customized underwriting to integrations that connect their applications to partner ecosystems, a new generation of InsurTech solutions will be needed to remake insurance business models.
Better Data Capture
Having accurate information is essential to insurance underwriting. This is even more important when it comes to embedded insurance because rates need to be calculated quickly so they can be provided along with other purchases. In many cases, form information may need to be processed quickly to obtain key data on the customer and the details of their purchase. When InsurTech applications are equipped with automated forms processing tools, they can quickly extract key information and use it to make faster, more data-driven decisions.
Versatile Viewing Capabilities
Whether an InsurTech application stands on its own or is integrated into another service offering, customers will often need to view information about their policy options in order to make an informed decision. On the firm’s end, insurance agents may need to review application details or bring up other resources to review when finalizing rates. By building viewing capabilities into their InsurTech applications with integrations like an HTML5 viewer, developers can ensure that their customers will never be caught depending upon external platforms for document viewing or sharing.
Expanded Contract Automation
Many insurance policies still require some form of contract, even if digital signature technology allows these forms to exist entirely in electronic format. Having the ability to rapidly assemble a contract as part of an embedded insurance solution can further enhance the streamlined customer experience. InsurTech developers can integrate automated document assembly tools to rapidly build contracts from pre-existing templates and quickly fill in the necessary details or add additional clauses.
Accusoft InsurTech Solutions for Embedded Insurance
Accusoft’s collection of SDK and API integrations give InsurTech developers the tools they need to enhance the flexibility of their applications. Our software solutions provide proven, market-ready viewing and processing features so development teams can keep their focus on refining their platform’s innovative core functionality. Whether it’s the versatile forms processing features of FormSuite, the powerful HTML5 viewing capabilities of PrizmDoc Viewer, or the automated document assembly tools of PrizmDoc Editor, Accusoft integrations can help InsurTech developers get their applications to market faster and explore the possibilities of embedded insurance.
We’ve been working hard to design software integrations that meet the needs of the insurance industry and InsurTech developers. Download our InsurTech solutions fact sheet to see how our constantly evolving family of SDKs and APIs can improve your application’s capabilities and performance.