Chapter 3: Embedded insurance is step one. Insurance as a service is the entire roadmap.
We’ve said it before and we’ll say it again, purchasing an event cancellation policy is often an afterthought, nothing more than a necessary evil for a worst case scenario. Complicated wording and back and forth with brokers who don’t necessarily understand your risk make purchasing insurance the last thing most of us want to do. It’s often put off as long as possible and details aren’t given the attention they deserve, which results in you not getting the type of cover you actually need. But, what if that wasn’t the case? What if you could get a policy without breaking stride while planning your event?
Enter embedded insurance
What is it? Embedded insurance integrates the option to purchase coverage within an existing product or service. It’s centered around the idea that insurance should be bought, not sold. Acquiring insurance becomes a part of the overall journey rather than a completely separate activity.
Odds are you’ve probably already taken advantage of embedded insurance without even realizing it. Have you ever rented a car, bought a plane ticket or sent a package? In each of these situations, you have been presented with the opportunity to purchase insurance at the point of sale. Did you go to Enterprise, book a trip on United or send a package via DHL just to buy some insurance? We’re guessing no; however, with the click of a button or the tick of a box, you have the option to add coverage to your car, flight or package. Selling insurance is not the primary goal of any of these organizations but merely an add-on that is intended to make your life easier. Whether you’re more risk averse and take advantage of these solutions, or prefer to live life on the edge, it has become extremely easy to be more safe than sorry (though it will cost you a few extra bucks).
Even before the pandemic, our lives were becoming increasingly digital. From ordering food or catching a ride to spicing up our wardrobes or renting a movie, what we once had to leave our homes to do can now be done from the comfort of our couches. (Why we would need a ride if we’re not going anywhere, not sure, but you see our point!)
You may remember this statement from the introduction:
Industries that have been historically resistant to change and digitalization (namely insurance and to a certain extent, live entertainment) have also been forced to adapt and implement tools not only previously ignored, but seen as detrimental to their culture of doing business.
Insurtechs are stepping in and snatching up the opportunity to build new tech that improves the customer experience, hence “embedding” insurance exactly where it’s needed, when it’s needed. Making insurance available within a product you already use removes the barriers of acquisition, that tricky bit of finding an appropriate product yourself and dealing with brokers, and makes it simpler to get the right cover for your specific needs.
Furthermore, embedding insurance into software platforms provides access to relevant data which results in a more accurate risk analysis. This data can also be used to identify patterns, personalize policies and offer services tailored to meet the risk appetites of the insured. Knowing about you, and your risk, at a micro level can also have an impact at a macro level and address the...
You guessed it...protection gap
Using that data we talked about in Chapter 1, policies can be personalized so you get the coverage you need based on your actual risk. Because you're purchasing insurance through a platform that already captures this data, the coverage more accurately reflects what you need from both the type of coverage (plus any add-ons) and the size. So you’re neither underinsured, or not insured at all, for what you should be. Plus it’s way less annoying to buy if your event details have already been captured and tied to your insurance application. Not to mention, buying it early when initially forming a plan might save you a buck or two.
But, that's not all
No brokers means less runaround and fewer commissions to pay. Cutting out this three-way between you, the broker and the insurance carriers means less chance of details getting confused or lost, as well as allowing you to get your policy quicker.
Making insurance available online through a digital platform puts you in the driver’s seat, providing personalization and accurate risk evaluation at point of sale.
By embedding insurance into a platform you already use, much of the information you need to fill out those lengthy paper forms can be incorporated directly into your application through smart data collection. The ability to auto-fill information simplifies the application and makes the purchasing process completely frictionless.
Insurance as a service takes embedded insurance to the next level. From digitizing a single process to a completely digital, end-to-end solution, there are a few different models emerging within the insurtech industry, but it’s all about integrating the insurance experience into your existing day-to-day processes.
Traditional insurance isn’t leveraged until something has already gone wrong and it’s time to initiate a claim, but some insurance as a service providers (like eve 😉) are developing models using analytics to proactively detect risks. Real time data about emerging risks, combined with intelligent insights, provides the insured with an opportunity to proactively manage those risks and may even result in the prevention of a claim.
If something outside of your control does occur and you need to make a claim, this can be done digitally as well. The process is simplified with an easier solution to capture the details of the claim and communication integrated with your devices as well as in the product. Having this information all in one place also means you get your money quicker, which is often critical when you have multiple demands competing for your budget.
- Insurtechs are the driving force behind the implementation of modern business practices in the insurance industry. They focus on streamlining operations, reducing costs and improving your customer experience.
- Data is the most valuable commodity in the world today. Using data to help inform, advise and dodge pitfalls is the future of event insurance. Experience helps you better understand the root cause of event cancellation, which in turn allows you to devise mitigation techniques and procedures that reduce the likelihood of history repeating. Not every risk is foreseeable or preventable, but the more access you have to resources and experience, the better chance you have of predicting and preventing things from going wrong.
- Parametric insurance is not intended to replace traditional insurance, but as a complementary solution to cover a myriad of alternative risks. Parametrics could offer customers the option to buy specific policies that meet their individual risk appetites and provide protection against the precise risks threatening their business. Parametric insurance for the events industry is still some way off, but we can see it becoming the next big thing in contingency insurance, such as Business Interruption and Event Cancellation.
- Embedded insurance makes acquiring a policy less complicated, quicker and more suited to your needs. While insurance as a service solutions integrate insurance processes in a fully digital offering, embedded into your everyday operations, backed by real-time data insights and support.
What does all of this mean for event professionals?
- Transparent policies
- Tailored and flexible coverage
- Competitive pricing
- Innovative (and proactive) risk solutions
- Simplified processes and more digitalization
Sounds pretty good, right?
We’ll leave you with this one last thing
With eve, buying a policy becomes part of the event lifecycle, not just another daunting task on your to-do list. We have transformed the traditional event insurance experience of purchasing, using and claiming on a policy to be completely digital; the application, communication and policy information is all handled within the eve software.
The fully digital experience also provides data-driven insights that put you in a better position to devise a risk management strategy and implement a solution before all is lost, hopefully eliminating the need to make a claim in the first place. Our focus on mitigation and risk management is a proactive way of aligning event organizers and eve's desired outcome of hosting successful events, rather than the more traditional insurance model which is exclusively reactive.