Embedded finance redefines future of the insurance sector

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The unprecedented COVID-19 pandemic caused a worldwide health crisis which led to entry of multiple new-age tech-driven businesses that not only meet the need for health and other related insurances but also managed to secure place in the market and carved out their position in global insurance industry. Insurtech companies are introducing new technologies such as artificial intelligence (AI), machine learning (MI), Internet of Things (IoT), apps and blockchain to improve the efficiency of insurance and reduce the processing time.

Facilitating easy insurance on everyday basis to customers by understanding their needs, many insurtech firms are shifting to embedded insurance through innovative partnerships.

• In July 2022, Bimaplan, an insurtech start-up has partnered with intercity travel start-up named as Zingbusto provide travel insurance as an additional benefit to its customers.   In this business association, Bimaplan provides an easy operational and technological process to Zingbus in providing insurance services by enabling a travel-tech platform.  Bimaplan will provide a range of coverage, accidental travel death, emergency medical cover, permanent total disablement, emergency medical evacuation cover, loss of baggage during travel, and travel accidental hospitalization cash. 
• Chubb, a travel and casualty insurance company has partnered with Royal Brunei Airlines in July 2022 to provide embedded travel insurance products to customers. Chubb's travel insurance will cover a range of products. viz.accidents, unexpected overseas medical cover with Covid-19 cover, and travel inconveniences such as loss of travel documents, luggage, and trip cancellation. This partnership helps passengers to gain access to travel and medical services with a 24-hour helpline and ancillaries to improve the experience of booking and travel with Royal Brunei Airlines. 
• Next insurance, a digital insurtech company involved in small business insurance has partnered with Evident, a third-party insurance verification service in July 2022 to cater the tailored insurance solutions to small businesses. Through this partnership, Evident verifies and improves the compliance according to the company's requirements and Next Insurance will provide the exact loan that the businesses need to grow and upscale. The company's risk managers deal with the small business vendors, and Next Insurance provides insurance through its embedded insurance program called as NEXT Connect. 
• Symbo Insurance, an India-based insurtech start-up that started insurance under the point of sales person (PoSP) model has slowly entered into the embedded insurance segment. The company utilized several data pools to understand the behaviour of customer and associated risks in the embedded insurance sector and started getting traction in 2020-21. Symbo provided life style based embedded insurance on day-to-day products. For instance, the company provided insurance for shoes including brands like Redtape, after knowing the customer's concern about frequently damaging soles. Lenskart, Playo, and Decathlon are a few customers for Symbo to design insurance policies for their products and services. 
• Zimyo, a platform that offers HR and payroll solutions, entered into the embedded finance space in July 2021 by launching an employee benefits module to empower organizations to support their employees. Zimyo has partnered with several insurance companies and non-banking financial companies (NBFCs) to provide personal loans, health and term life insurance, and payday loans. By using embedded finance, these services will be executed hassle free with a great customer experience. 

Insurance has become more common and essential for many businesses' safety and customers in today's world expect insurance for everyday products. Travel insurance is one such kind that it is no longer viewed as a luxury in the post-covid world. Many travelers seek improved travel insurance plans that protect them from unforeseen situations. PayNXT360 believes that the embedded insurance sector will experience significant growth in the next three to four years as the insurance industry has been rapidly growing. 

To know more and gain a deeper understanding of the global embedded finance market, click here.