What’s the genius behind embedded insurance?

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Continue reading: Insurance start-up Cover Genius increases valuation to $ 1 billion

Cover Genius offers embedded insurance with software that can be placed on a third-party digital platform.

“This is end-to-end, which allows you to sell a product, but also to maintain and then process the claims, and enables our partners to embed it in their own digital platforms,” ​​said McDonald.

Insurtechs like McDonald’s don’t base their existence on finding insurance customers like a traditional insurance company. They also don’t focus on working with insurance companies like other insurtechs might. Instead, they are partnering with other companies in industries that can benefit from selling insurance with their products. In this way, they make clever use of existing customers and existing platforms.

“So we are part of your process, part of your application process, part of your shopping cart. Traditionally, you may have seen white label products where you click on a co-branded website to search for a product. We are not. Our aim is to embed the offer in order to offer the end customer a comfortable experience in which he does not have to leave the environment, but remains on the same digital platform, ”said McDonald.

Embedded insurance is a clever combination of technology and opportunism, he believes.

“That’s what we’re concentrating on. Insurtechs, or traditional insurers, focus on developing an insurance product and then selling it. We focus on that sales channel and then offer the right insurance or guarantee product for that particular digital experience, ”he said.

After starting out with travel insurance products, Insurtechs specializing in embedded insurance now offer product protection and insurance across a range of industries including retail, automotive, logistics and real estate.

Cover Genius counts among its customers large companies such as Booking Holdings, eBay and Shopee.

One of Cover Genius’ more interesting customers is Descartes Systems Group, a Canadian multinational technology company specializing in shipping software for logistics and supply chain management.

“So they use our platform to embed insurance offers in their shopping cart or their booking channels or their registration forms, in their own websites or apps or whatever. They connect using our API, a connection method that enables them to embed our products in their own digital websites and the like. “

However, McDonald said the most interesting feature of the Cover Genius insurance offering for Descartes is less the shopping cart and more the automation and the data.

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“You may be offered a protective product in shopping carts – and we are certainly a part of it, and we have had part of that experience in our history – but we are starting to see new interesting areas of product design in the other software platforms,” he says .

One of those areas, he said, is companies that ship products on marketplaces like eBay or Amazon. The embedded insurance automatically insures packages.

But McDonald said shipping underwriting methods are also changing as all of the data from the digital platforms that process these parcels allow for more accurate underwriting based on the exact contents of each parcel.

“In the past, people just said, ‘Okay, this shipper sends 10 million packages a year and we think about half of that will be electronics, maybe 30% groceries and 20% something else,’ you know” said McDonald.

This approach is now old-fashioned.

“Now that the software platforms know what is in the package, container or truck, we can secure each individual package more precisely and help insurers get the risk they want,” he said.

McDonald said real estate technology, or proptech, is another exciting area for embedded insurance offerings.

“Lending and property purchases are becoming increasingly automated and we believe there are opportunities in this environment to offer insurance products,” he said.

There is also fintech, especially embedded loans.

“There is a lot of data about a customer in it, and with programs like this, the end customer often has to have insurance in order to be able to buy the financial product. This is another area we’re really looking forward to, ”said McDonald.

Cover Genius is already active in around 60 countries, including the USA. McDonald plans to double its workforce from 200 within the next 12 months.


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