PYMNTS June 2021 Embedded Insurance Report: Leveraging Transaction Data to Expand Coverage in a Digital-First Market, done in collaboration with Cover Genius, asks a resoundingly important question at a pivotal moment in the growth of contextual commerce: “What are the best ways to reach prospective insurance customers amid this unprecedented digital shift, and which institutions are best positioned to do so?”
Putting that question among others to a census-balanced survey of over 3,550 U.S. consumers, our researchers discovered that 62 percent “experienced major events or made significant purchases over the past 12 months — and 41 percent obtained insurance to cover them.”
The study adds that “the most common significant purchases were of expensive home furnishings, which 22 percent of consumers reported making, personal electronics (20 percent) and vehicles (19 percent)” among other activities that triggered interest in insurance.
Another prime motivator that emerges from the new data is the power of convenience in insurance purchasing decisions, particularly when offered in context by trusted entities.
“Convenience is understandably the primary reason respondents found bank-embedded insurance offers appealing,” according to the June Embedded Insurance Report, finding that 49 percent of consumers were “at least somewhat interested in such offers consider them an easy and convenient way to get coverage. Trust is big, with 46 percent of this group believing banks will protect data — “a vital consideration when it comes to consumers’ transaction histories.”
Among the most impactful findings of the new research is that “traditional providers — insurance carriers and brokers — are not meeting demand for coverage across the wide-ranging categories in which consumers are interested,” per the study, as only 4 percent of consumers obtained extended warranties on expensive electronics through traditional channels, “but 70 percent would be ‘very’ or ‘extremely’ interested in bank-embedded offers.”
“This pattern extends to more common types of coverage, including life and health insurance: 60 percent of those who have obtained these types of policies through traditional providers would be “very” or “extremely” interested in corresponding bank-embedded offers,” or roughly triple the level of interest “consumers overall have for these types of offers.”