A recent survey conducted by Chubb, the world’s largest publicly traded property and casualty insurance company, has unveiled a significant shift in the global insurance landscape.
The survey, titled “Banks and the Digital Wallet Race – The Embedded Insurance Strategy,” involved 2,000 consumers and 200 finance leaders and was carried out during the second quarter of 2023.
Key findings from the survey indicate that financial executives involved in insurance decision-making are anticipating a remarkable surge in revenue from embedded insurance offerings.
Currently, only one in five firms generate more than 10% of their revenue from embedded insurance, but 56% of surveyed financial executives expect to achieve this level within the next three years.
The study also highlights the growing importance of digital insurance embedded within websites and apps. An overwhelming 81% of respondents stated that digital insurance is transitioning from a nice-to-have feature to a must-have offering.
This trend is particularly pronounced in emerging markets across Latin America and Asia, with even North America – historically slower in adopting digital insurance – showing signs of accelerated growth.
Consumer demand for embedded insurance is booming, with over half of the surveyed consumers globally expressing interest in purchasing more insurance.
Notably, 46% of consumers believe that digital channels are the most convenient way to make insurance purchases.
Sean Ringsted, Chubb’s Chief Digital Business Officer, emphasised the intensifying competition among banks and fintechs to capture a larger share of consumers’ digital wallets.
Embedded insurance is becoming a strategic tool for fostering customer relationships, driving growth, and addressing protection gaps.
The survey reveals a trust advantage for established banks and insurers over digital-only counterparts. Nearly 60% of respondents expressed high levels of trust when purchasing insurance from established banks, while 58% indicated the same for established insurers. This compared to 45% and 31% trust levels for digital-only insurers and banks, respectively.
Gabriel Lazaro, Head of Digital at Chubb Overseas General Insurance, highlighted the growth opportunities for banks and fintechs in Asia and Latin America. These regions view legacy banks and insurers as benchmarks, reflecting a strong demand for embedded insurance.
The survey suggested that expansion of embedded insurance channels would extend to developed regions and established financial institutions.
In North America, embedded insurance is gaining traction as a strategic growth strategy, particularly within the banking sector.
Amy McNeece, Senior Vice President of Digital Consumer Partnerships for Chubb in North America, noted that relevant insurance offers embedded in digital transactions are enhancing customer loyalty and brand engagement.
Chubb’s survey was conducted by iResearch Services during the second quarter of 2023. The responses were collected from a diverse group of 2,000 consumers and 200 financial executives, representing various age groups, education levels, and professional backgrounds.
The surveyed regions included North America, Latin America, Asia Pacific, and Europe.
