Tapping into embedded insurance could have big benefits for agents but stragglers risk being left behind if they do not get on board, Applied Systems SVP of commercial lines Raghav Tanna (pictured) has cautioned.
Applied Systems’ Tarmika Insured went live with its commercial embedded insurance proposition earlier this year. The software house hopes that its US agents will use the embedded insurance technology to make the most of untapped routes to customers, according to Tanna, who joined the insurance software giant last year on its acquisition of Tarmika.
Carriers have looked at bringing direct to consumer commercial lines propositions to fruition, including big names such as Liberty Mutual and Progressive.
The risk is that if agents do not get on board, this effectively “shuts out agencies”, according to Tanna.
“Our goal with this product launch was to say, if carriers can do it and carriers go direct to consumer, why can’t agencies go direct to consumer?” Tanna said. “We’re essentially giving all of the direct-to-consumer tools that carriers have back to agencies so they can put it on their point-of-sale systems, they can put it on the websites, they can put in their affinity partnerships, and they can get business from places where you typically wouldn’t see people buying insurance.”
The embedded quoting application can be included on a company’s website or on a custom-built landing page, ideally at a stage when a customer would be buying another product for which insurance would be relevant.
“We want consumers to be able to buy insurance when they’re buying other things and it makes sense to buy insurance,” Tanna said. “If you’re doing your taxes, you should buy insurance, if you’re buying a new car for your business, you should buy a commercial auto policy.
“All of that stuff is where we think this is invaluable.”
Embedded insurance is a bundled method of selling insurance products while a customer is buying another product. For example, an auto dealership might offer auto insurance coverage at point of sale.
It has previously been described as “exiting through the gift shop” by embedded insurance auto specialist Polly founder Jeffrey Mongeon.
Digital advancements have contributed to the rise in embedded insurance offerings, and the UK is currently ahead of the curve, according to Applied Systems’ Tanna.
Embedded insurance is seen as a key area of potential growth, with forecasts suggesting property & casualty (P&C) embedded insurance sales could range from $70 billion in the US to $700 billion globally by 2030, according to estimates cited by Deloitte.
Factoring in the personal lines market, more than 30% of all insurance transactions could take place within embedded insurance channels within five years, EY insurance and digital experts have predicted.
The Tarmika Insured embedded insurance proposition has been live for some months, but was officially unveiled at Applied Net, the insurance software house’s annual event, in October.
“We’ve had some top agencies and carriers using it but we didn’t really publicly announce it, because we weren’t sure how far we could take it,” Tanna said. “As we started growing the product, we realized this could hold some weight here, and this is the first embedded insurance solution in commercial lines that’s actually functional.”
Currently live in the US, Tanna predicted that a Canadian Tarmika Insured commercial embedded insurance launch could be on the cards down the line.
"One of the benefits that we have operating across multiple regions is we often times get to see how changes in one region may play out because we have seen the story already,” Tanna said. “In the UK, they have been connecting commercial lines and the digital roundtrip of insurance for many, many years and we see the benefits it provides the channel.
“We are progressing quickly toward that reality here in the US, and are making progress in the Canadian market with the same end goal - we want to better connect and automate the commercial lines quote and bind experience.
“The underlying technology is slightly different in the regions – Policy Works in Canada – and there is a lot of insurer energy in that market to positively progress this for the industry too.”
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