According to recent research by Momentive ai, commissioned by insurtech Cover Genius, property players demand convenience while poor customer outcomes incite a shift toward embedded insurance at the cost of traditional insurers.
Cover Genius said: “Due to convenience, customers worldwide intend to switch to embedded insurance sources in the future (+36%) at the cost of traditional insurers (-14%). However, despite their desire for embedded protection offerings, 67% of homeowners, landlords and renters were not offered insurance during their application process.”
According to the study, short-term rental hosts want around-the-clock landlord insurance from their listing provider, not just the overlapping coverage they currently provide during the rental period.
Citing convenience as their main motivation, almost 100% of short-term rental hosts (98%), a rising segment of property owners, want their rental listing provider, such as Booking.com, Airbnb, Vrbo, Expedia, etc to offer landlord insurance
Analysts explained: “The standard protection included with the majority of rentals on listing sites often overlaps with a host’s own policy, meaning they’re overpaying for their insurance. Embedded landlord insurance overcomes this issue, especially in countries where landlord insurance is not mandated and underinsurance occurs.
“An on-demand offering that streamlines host protection and landlord insurance has the potential to eliminate overlap and help hosts save money on either their policy or listing fees.”
Additionally, data showed that 32% of hosts favour paying less to their short-term rental listing site while 35% favour paying less for Landlord or Homeowner Insurance.
The findings also revealed claims experiences across property insurance are poor, driving customers to seek protection from other sources. Those who recently made a claim were willing to switch providers at a rate 16% higher than those who have not recently made a claim, analysts noted.
Angus McDonald, CEO and co-founder of Cover Genius, said: “Customers are demanding a better end-to-end experience when renting and buying properties.
“By leveraging embedded insurance, digital companies can streamline the historically fragmented property insurance processes with digitised protection for the entire home lifecycle, from building to owning to renting. This new research displays a massive opportunity for digital companies – whether you’re a short-term rental provider, bank, lender or proptech – to deliver a tech-led solution their customers are asking for.”
The consumer-focused study surveyed more than 15,000 homeowners, landlords and renters worldwide to examine interest in a new model of insurance distribution where realtors, banks, lenders, mortgage brokers, short-term rental listing providers and other proptechs offer insurance during the application process for buying or renting their property.
These findings follow three other reports that have found customers around the world desire other types of embedded protection for its convenience. According to Cover Genius, the shift in preferences comes at the cost of traditional insurers, and in favour of airlines and travel agents, banks and retailers.
