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Scaling Embedded Insurance amid FiDA regulation
As a pivotal force in the insurance landscape, Embedded Insurance is set to redefine how insurance products are offered and consumed. By 2035, it is projected to capture USD 500 billion in gross premiums within the property and casualty (P&C) insurance sector alone, accounting for approximately 20% of the global market.
Key insights of the report
- Global expansion: With technological advancements and simplified regulatory requirements, Embedded Insurance is poised to dominate markets like China and other emerging regions, potentially comprising up to 50% of distribution
- Life and health (L&H) opportunities: The increasing demand for retirement solutions is driving growth in Embedded Insurance offerings, creating integrated and customer-centric products
- Strategic importance: 95% of insurance executives recognize Embedded Insurance as critical to future sales strategies and enhancing customer experiences
- Consumer readiness: 60% of consumers are open to Embedded Insurance, particularly in travel, home, and motor sectors
- Market potential: By 2030, Embedded Insurance could become the third-largest sales channel, contributing to 20% of insurance sales and revenue
In today's rapidly evolving market, where industry lines are increasingly blurred, customers are seeking comprehensive solutions rather than standalone products. Embedded Insurance delivers added value to consumers and offers mutual benefits to industry partners by seamlessly integrating with existing services. While not a new concept, its adoption is accelerating as non-insurance companies enter the market. This report examines how changing consumer behaviors, technological advancements, and shifts in ecosystems might position the FiDA Regulation as a pivotal catalyst in this transformation.
What is Embedded Insurance?
Embedded Insurance involves integrating insurance solutions into non-insurance products and services offered by third-party partners at the point of sale. This approach simultaneously addresses multiple customer needs and includes distributing insurance products under the brand of a non-insurance partner, making it a seamless part of the purchase journey and value chain.
What is FiDa?
FiDA (Financial Data Access) is a European Union regulation focused on enabling secure and standardized sharing of financial data. It allows consumers to authorize third-party access to their data, which in turn fosters innovation and the creation of personalized services. Insurers can leverage this data to provide customized products, enhancing risk assessment and improving customer experience.
Find more information around FiDA here
Aligning Embedded Insurance strategies with FiDA Regulations for success
With FiDA on the horizon, it’s evident that adaptation is crucial for gaining a competitive advantage. To succeed, insurers must refine their partner and customer targeting, reshape customer journeys, and strategically invest in technology. Leading the charge offers several benefits:
- 1Enhanced competitive positioning
- 2New revenue streams
- 3Improved customer loyalty
- 4Operational efficiency gains
- 5Stronger partnerships
Jonas Meereis co-authored this report.
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