Open & Embedded Insurance 2022 Report: a pivotal time for the insurance industry
Open & Embedded Insurance Observatory (OEIO) just released the 2022 edition of its Open & Embedded Insurance Report, developed in collaboration with Sønr. From the main learnings from Open Banking and a breakdown of some of the key Open Insurance initiatives around the world, to 20+ interviews and case studies, the report covers all aspects of this new and ever-growing Open Insurance world.
As highlighted by Yuri Poletto (Founder of the Open and Embedded Insurance Observatory) in the very first lines of the report, the gap between what insurance offers and what customers want has been constantly growing over the last years:
Insurance is living a pivotal time as it is struggling to keep pace with other industries.
According to him, we mainly think about what insurance can do for us (keeping the family safe, protecting the business, etc.) when there are more interesting topics/questions. What if I get offered my cyber insurance by my cloud provider? What if I can get and use my next life or health insurance in connection with the healthcare app I use every day to improve my health? He concludes his introduction by stating that “this is not science fiction. It has already been going on for years. And the biggest wave is ahead of us.”
What is embedded insurance?
It is about placing insurance products and services in the day-to-day flow of customers’ lives and work. It benefits all stakeholders. On the one hand, it simplifies the user journey for the customer, and on the other, it puts insurance front and center in the user’s mind when they are carrying out what is an already familiar purchase journey.
As explained in the report, “every company can be an insurtech company. Across all business and personal customer segments, there is an increased demand for more convenient, seamless and personalized insurance products and services, that better help insurers adapt their coverages to their evolving needs and that can be easily accessible from the software they use daily”.
Learning from Open Banking
The report also features Marie Walker, Co-founder of Open Future World, who shares 11 key learnings for insurance companies, inspired from the ongoing Open Banking revolution.
- RESISTANCE IS FUTILE: four years after the introduction of PSD2 in Europe, some banks are still lobbying against it…yet Open Finance continues to move forward. And in the US, consumer demand and the pressures of a competitive market are pushing for more innovation.
- SUCCESS IS A STATE OF MIND: while some banks responded to Open Banking with a compliance mindset, others – and a new breed of innovative challengers and fintechs – have been awake to the opportunities.
- IT’S ALL ABOUT THE CUSTOMER: initial Open Banking conversations were focusing on compliance, but things have moved away from it and the need to focus on the consumer has now become evident.
- …BUT IT’S ABOUT YOU TOO: data moves in several directions via secure APIs – organizations can be data recipients as well as data providers, which opens up new opportunities. The standardization of APIs will make it even easier to build new connections across the entire ecosystem.
- THE ODD COUPLE: partnerships between incumbents and fintechs is not always easy. A healthy way to approach this type of relationship is through open communication and deep collaboration. The partners have to appreciate each other’s values and points of view.
- INCLUSION IS EXCITING (AND PROFITABLE): Open Banking clearly democratizes access to financial services. An open and partnership approach will enable a much easier delivery of insurance services.
- EMBEDDED JUST MAKES SENSE: taking the financial service to where the customer actually just makes sense, as customers want seamless and low friction services that fit as much as possible with what they do/use in their daily lives.
- WHO ARE YOU AND WHAT DO YOU REALLY OFFER?: the idea of trust has become central in Open Banking. By integrating it within their offers, banks see a new possible role for themselves in the digital age. Is “risk/protection” the equivalent for insurers?
- COMMUNICATING VALUE: by creating new propositions that customers value, financial institutions will meet success. After all, what matters the most to customers is the value they get from using a specific service.
- THE BIGGER PICTURE – ECOSYSTEMS BEYOND THE INDUSTRY:
- OPEN MINDS: Marie Walker underlines that “we’re on a journey and that it’s not entirely clear where we’re going to end up. But open is the future. And it is very exciting.”
Open banking – and open insurance when it comes – isn’t about compliance. It’s about creating new value. Providers who look to capitalize on the opportunities will be the winners.
Marie Walker
More than 25 interviews have been conducted as part of the report. It notably features our partners from Superscript (who recently joined the Marketplace – product will soon be available).
Henry Newby (Partnerships Director, Superscript) highlights: “Embedded insurance and open APIs have allowed us to super-charge our distribution channels. By strategically partnering with leading providers in key sectors, we have opened up the ability for customers to purchase insurance from us through 3rd party websites/apps, via seamless online journeys.”