Smartpay Corporation has inked a deal with Chubb Insurance Japan to introduce the country's first embedded insurance service for buy now, pay later (BNPL) platforms.
Set to launch in summer 2025, the collaboration addresses critical challenges in Japan's traditional insurance market, which has predominantly relied on analogue, paper-based processes.
With cashless payments now accounting for approximately 50% of consumers’ monthly spending, the insurance industry faces mounting pressure to digitalise and personalise its services.
The global embedded insurance market demonstrates growth potential, according to the data. Projections indicate a compound annual growth Rate (CAGR) of 11.6% from 2024 to 2030, with the market expected to reach approximately US$175.25 billion by the end of the decade. The Asia-Pacific region currently leads this emerging market, representing about 39% of the global share.
The initial product will be launched in partnership with Fútbol Opción, a soccer cultural exchange program provider. This approach allows families to handle program fee instalments and travel insurance enrolment in a single, streamlined process.
Likewise, it addresses a significant pain point for parents, providing insurance coverage for international travel while making expensive cultural exchange programs more accessible through instalment payments.
Embedded insurance represents a new approach to financial services. The technology offers advantages including real-time risk assessment, dynamic pricing, and improved customer experience. This model caters to younger consumers, especially Generation Z, who prioritise convenience and speed in financial transactions.
The partnership builds on Chubb's global experience in digital insurance solutions. The company has previously collaborated with major financial technology platforms like Grab in Southeast Asia and Nubank in Brazil to bring innovative insurance delivery methods.
Market research indicated opportunities for this approach. Post-pandemic surveys reveal that 47% of Japanese travellers are seeking new ways to purchase travel insurance, moving away from traditional methods. The travel insurance market in Japan alone is projected to grow from US$678 million in 2023 to US$1.523 billion by 2028.
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