Embedded Insurance #2 | Transforming the Home Ecosystem

Sibylle Fischer
February 10, 2020
Innovation, Startups, Products
Embedded insurance is already transforming the customer journey across sectors, from mobility to wellness to retail and beyond. Especially in products and services related to home and property the embedded model can help improve customer experience, engagement and loyalty.

The embedded home ecosystem

From closing the protection gap to offering contextually-relevant, frictionless customer experiences, in the first part of this blog series, Why Embedded Insurance is a Game Changer for Insurers and their Customers, we explored the potential of embedded insurance to evolve and expand the insurance distribution paradigm. In this post, Embedded Insurance Part Two: Transforming the Home Ecosystem, we take a closer look at some of the ways the embedded model is already making waves in products and services related to home and property.

As the global smart home market grows exponentially, property insurers have already begun the hard work of shifting their traditional business operations to adapt to a rapidly changing landscape. Some insurers are looking to the retail sector for lessons on improving customer experience and engagement, with products that are more frictionless, user-friendly, personalized and dynamic. This “retailization” of insurance is really an investment in analytics, as data is leveraged to create bespoke products and pricing that vary according to customer preference, behavior, and context. 

Unique protection through cooperation within the home ecosystem

In order to best take advantage of this evolving customer and market landscape, insurers are now actively mining for opportunities to cross-sell unique or customized products into new marketplaces, greatly expanding their on-demand and single-item insurance offerings for the home ecosystem. As one such example, Airbnb’s Host Protection Insurance automatically grants primary coverage of 1 million USD to all hosts and landlords using the platform for bookings. That means protection against select liability claims (bodily injury or property damage) brought by third parties that arise from a listing during a stay. Though not a substitute or replacement for homeowners or renters insurance, host protection offers peace of mind to hosts and landlords and gives Airbnb a competitive edge.

As another example, Baloise partnered with Swiss moving company, MOVU, to create a novel embedded product offering: MOVEasy insurance. Customers booking a move on MOVU.ch now get all-risk plus “bad frog” coverage bundled with every service purchase. Plug-and-play solution provider, Qover, in collaboration with Baloise and real estate website IMMOWEB, also created a new home insurance product tailored to a specific audience -- in this case renters in need of fire insurance. The result? Customers get a better product with more protections, a streamlined customer experience and optimized cost. 

Working in cooperation with Swiss furniture company, Möbel Pfister, Baloise recently expanded its single-item insurance offerings by creating a product for customers looking to insure newly purchased furniture. This coverage, sold simply and without hassle (and directly at point of sale), goes further than conventional household insurance would, protecting furniture against mechanical damage, improper use, short-circuit/voltage fluctuations and other damage. Similarly, in partnership with Swiss telecommunications provider, UPC, Baloise developed a suite of single-item insurance products tailored to the gaming and e-sports sector -- offering that community novel protections against damaged game consoles, laptop theft, and even lost headphones.

The power of embedded products

The bottom line: insurers and industry disruptors nimble enough to give consumers the kinds of experiences they want will find themselves at a distinct competitive advantage in the years to come. And increasingly, insurers will need to make strategic decisions over how deeply they will engage the promise of new digital ecosystems, especially as it relates to their legacy business models. By harnessing the power of embedded products, insurers, industry disruptors and their partners can work together to serve the unique needs of their customers, all while maintaining market share, encouraging profitable growth, winning customer loyalty, and ultimately strengthening the value chain for the future of their entire ecosystem. 

Next month I’ll share part three of this series, where I explore the many ways in which mobility is leading adoption in the embedded insurance space.