P&C insurers must decide their role in the embedded insurance market

While only a small portion of the market today, embedded channels will make up more than 30% of all insurance transactions by 2028, per EY. Insurers who don’t figure out now where they fit into the ecosystem—and how to implement the necessary technology—may lose digital-first customers and younger demographics to competitors who do.

  • Personal property and casualty (P&C) insurance will be more disrupted by embedded offerings than other lines. These simple products are easy to embed. EY already expects more than 30% of insurance transactions overall to be embedded in the next five years—but the percentage will be much higher in P&C.
  • Interest is particularly strong among younger consumers, who are becoming the primary insurance buyers. Sixty-four percent of Gen Zers and millennials are interested in buying embedded financial products, versus just 42% of baby boomers, per an October 2021 Bond and Cornerstone survey. To get in on the ground floor of growing purchasing power, insurers must meet younger generations where they are now.
  • Embedded insurance will trigger a wave of insurance disruptors. Embedded insurance startups raised $1 billion in VC funding globally from 2021 to mid-2022, per dealroom.co. New entrants will provide faster, simpler, and more convenient insurance journeys—which incumbents must match to stay competitive.
  • Automakers are already encroaching on insurers’ turf. More will follow Tesla’s lead and underwrite their own insurance policies to meet consumer demand: 79% of Gen Zers and millennials would be interested in insurance bundled with a vehicle, and 74% would buy it from an automaker’s website, per an October 2022 Majesco survey. To avoid disintermediation, insurers must offer frictionless embedded insurance propositions to automakers.


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