Unlocking the Power of Alternative Distribution
The market has seen a tremendous rise of embedded financial services in the last few years. This includes both embedded financial services for banking and consumer finance (e.g., ‘buy now pay later’ platforms on eCommerce sites) and insurance (e.g., offering coverage at a relevant point of sale, like travel insurance when buying a plane ticket).
Many industry observers anticipate significant growth of the embedded financial services ecosystem over the next few years. Industry experts predict that more than $70 billion gross written premium (GWP) will be sold through the embedded insurance channel after 2025.
Leading P&C insurers have successfully mastered distribution through direct and agent channels over the last several years. The next frontier will be to successfully leverage alternative distribution channels, including embedded insurance and affinity distribution, to drive profitable growth beyond existing sales channels.
Embedded insurance offers tremendous potential. So, how can insurers leverage it and be positioned for success?
Creating Win-Win-Win Opportunities
Embedded insurance distribution is a win-win-win for consumers, distribution partners, and insurers alike. Embedded distribution enables a better customer journey for consumers, with purchasing experiences simplified and time saved. For insurers, embedded distribution develops additional revenue streams and provides more efficient distribution and a continuous feedback loop to improve their products.
Embedding the insurance purchase in the customer journey of a non-insurance product or service can easily be achieved with readily available capabilities included in the Guidewire Cloud Platform: e.g., line of business and country content (Guidewire GO), Digital User Experience Design System (Guidewire Jutro), and the Guidewire Cloud API ecosystem. An insurer can download the Guidewire GO EMEA Travel product on Guidewire Marketplace, customize the product model in Advanced Product Designer (APD), load the product model into PolicyCenter, and easily generate the relevant REST APIs and the required digital assets.
This approach works well for insurers interested in expanding their own distribution networks with a selected set of distribution partners. Insurers may choose to very strategically target business partnerships based on their growth plans (e.g., work with travel agencies/portals who serve the relevant customer segments).
Scaling up Alternative Distribution Channels
Insurers can further scale up alternative distribution by using platforms like Bindable, an insurtech focusing on the US market. Bindable, a member of Guidewire’s Insurtech Vanguards community, facilitates sponsored, omnichannel, product distribution. Their technology powers more than 500 digital insurance websites and experiences for incumbents and new entrants alike. Each insurer and partner can choose which products and carriers to make available on their website, leveraging a fully white-labeled digital front-end experience to offer choice to the consumer.
Industry research conducted by Bindable shows that more than 60% of people are willing to buy insurance from non-insurance companies. When car dealerships choose to embed personal auto and motor products and mortgage companies embed homeowners’ products in their customer purchasing journeys, the benefits become apparent.
Forming Strategic Partnerships to Accelerate Market Success
To help insurers leverage these new channels and successfully grow their businesses beyond existing sales channels, Guidewire continues to invest in strategic partnerships in embedded insurance and alternative distribution via its Insurtech Vanguards and PartnerConnect Solution program. To help our customers learn more about our Insurtech Vanguards, we are launching a first-of-its-kind competition for our Vanguards, Pitch Day. It’s the opportunity of a lifetime for trailblazing startups. Learn more here.
And find more information about Guidewire’s Insurtech Vanguards on our website.