Around the world, major companies from automotive to wholesale are increasingly keen to add Embedded Insurance offers to their business model. Although estimates vary between different market observers, it is expected that global gross written premiums (GWP) generated with Embedded Insurance in the property and casualty (P&C) segment will be around EUR 0.5tr by 2030. To put this figure into context: the global GWP volume in P&C across all distribution channels amounted to EUR 1.8tr in 2022 according to the Allianz Global Insurance Report 20231. This underlines the high potential of Embedded Insurance for the whole insurance industry. But what is the motivation for companies whose primary and traditional focus is selling cars or wholesale products to engage in the insurance sphere?
This is not only to strengthen customer loyalty and enrich their consumer data, but also to create new and diversified sources of income. Through the mostly commission-based cooperation model with insurance companies, the adjacent revenue stream of Embedded Insurance offerings comes with low fixed costs – an apparent sure-fire strategy.
In this rapidly expanding global market, companies are trying to find the right approach to provide a holistic value proposition including insurance offerings to their customers while making the right strategic choices in the selection of their insurance partners. However, a purely opportunistic approach will limit the Embedded Insurance potential from the start. Only with the right strategy, differentiation from competitors and alignment with the company’s brand and value proposition, corporates will be able to unfold the full potential of an insurance offering.