Making insurance seamless

Although global insurance premiums totaled $6.3 trillion in 2020, insurance isn’t just about transactions. At its best, it’s about trust.

Unfortunately, insurance in its current form is among the least-trusted sectors of the economy. Most people understand its value—62% of consumers say insurance provides peace of mind, 61% that it’s an important service, and 57% that it’s “smart and responsible”—but over half (53%) have had a bad insurance experience. Our own surveys show that less than half of customers trust the insurance industry. The result is a culture of underinsurance in even the most mature economies.

The insurance trust deficit: Few customers say they trust the insurance industry.

In fact, there currently is a $1.2 trillion gap globally between the protection consumers need and the insurance they have. Filling it will require insurance that’s more responsive, transparent, and affordable—not to mention easier to use and purchase.

And yet, insurance has remained remarkably unchanged over time. Like an untended garden, weeds have begun to grow:

• Actuarial data sets are largely static despite increased demand for dynamic pricing
• Insurers over-rely on traditional financial products and rarely invent new ones
• Offerings don’t reflect new ways of living and working
• Customer acquisition still relies on old-fashioned human networks
• Products have become commoditized
• Manual processes persist, leading to low customer satisfaction

It doesn’t have to be this way. Like banks did with mobile banking, retailers have done with digital wallets, and restaurants are doing with last-mile delivery, insurers and reinsurers can use technology to recast themselves as leaders instead of laggards.

There is a $1.2 trillion gap between the protection global consumers need and the insurance they have.

Embedded insurance creates new leads and markets

Like travel providers with flights and hotels, insurers should look for ways to embed insurance into consumers’ core activities. In a world of embedded insurance, buying insurance could be as simple as making a purchase through your AI-powered home assistant, then giving a verbal “yes” when it asks, “Would you like to pay a few dollars extra to replace your purchase if something happens to it?”

Frankly, that world is already here. To exploit it to the mutual benefit of their customers and shareholders, insurers can explore 3 emerging opportunities for embedded insurance. Download the report to learn how insurers can create new insurance products for modern experiences, integrate existing insurance products into daily activities, and apply data and technology from other industries to drive better insurance outcomes.