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Types of Embedded Insurance and How to Implement Them

In this post we’ll explore various different types of embedded insurance, with some examples to help you consider how you might implement them.

What is Embedded Insurance?

Embedded insurance means letting customers buy insurance cover as part of a wider transaction, without the need to make a separate purchase that would interrupt their sales journey.

Types of Embedded Insurance

Intrinsic Insurance

One form of embedded insurance involves adding a certain level of cover to the purchase of a product or service as standard. The customer does not even have to tick a box requesting the cover, and the price of the policy is already included in the overall price they pay for the product or service.

For example, some banks offer intrinsic travel insurance, mobile phone insurance, and even car breakdown cover as part of their bank accounts. In exchange for a monthly fee, customers can get the sort of varied cover for which they’d otherwise have to shop around.

Another example of intrinsic insurance is when businesses and employees offer specialist health insurance cover as part of an employee benefit package. In this instance, the insurance comes as part and parcel of the employee contract. The employee does not have to take any additional steps to get their cover – and they may only ever interact with the insurance company should they ever need to make a claim.

Read our full guide to embedded health insurance.

Bundled Insurance

Some insurers allow customers to purchase home insurance, car insurance, and other types of cover as a single product. This arrangement might be known as “bundled insurance”, but some insurers might have their own names for such products.

For example, Admiral once offered discounts for customers who bought two insurance products. Buying a bundled car and home insurance product was 7.6% cheaper than buying the two policies separately.

In this arrangement, the home insurance and car insurance remained two separate products. This meant that making a claim on one policy did not affect the other policy. But customers could purchase both types of cover in a single transaction. And what’s more, if they ever had to make a claim on either policy, they could do so via the same point of contact.

Insurance as an Add-On

Finally, some companies allow customers to buy insurance as an add-on at the point of purchase.

Common examples of this include:

  • Coach, rail, and airline companies allowing customers to purchase some forms of travel insurance, such as luggage cover, when they buy a ticket.
  • Very few event organisers and venues offer refunds as standard. However, some companies allow customers to purchase cover that would allow them to get a refund were they unable to make the event due to illness or other circumstances.
  • Some car dealerships allow customers to purchase car insurance along with a new car purchase. Often, this arrangement isn’t just convenient for the customer, it’s essential: As it’s illegal to drive without car insurance cover in the UK, purchasing insurance along with the car allows customers to drive their car home from the dealership.

Looking to Offer Embedded Insurance Products to Your Customers or Employees?

At Capacity Insights, we specialise in providing flexible and comprehensive healthcare and travel cover to businesses and companies for their customers or employees.

Whether you’re looking to invest in your first embedded insurance plan, or you want to change or add to your current package, we’re here for you.

Get in touch to find out more and see how we can help you.

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