WhiteSight

2023 Roundup: The Twists and Turns of Embedded Insurance in Travel

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Drive Safe, Fly Secure: Embedded Insurance Escapade

The travel and mobility sectors are roaring back to life now that the pandemic is in the rearview mirror. In the ever-evolving world of travel and mobility—a sector where getting from point A to B isn’t just about the ride—it’s about the experience, safety, and, yes, peace of mind. In 2023, travel wasn’t just about moving around—it was about the freedom to explore without the baggage of worry, thanks to embedded insurance fitting snugly into our plans. And mobility? Think of it as all the cool ways we zip around locally – cars, scooters, or those nifty e-bikes. Capgemini forecasts a surge in the global mobility insurance market, projecting its value to double from $0.65T in 2023 to $1.38T in 2030.

Unlike traditional insurance policies, embedded insurance offers a personalised and real-time approach to coverage, addressing the diverse and complex risks that exist in the sector. For consumers, this means an improved buying experience, tailored solutions, convenience, and accessibility. Travel and mobility platforms have been greatly benefiting by teaming up with insurance providers. They can share platform data for tasks like underwriting, risk analysis, pricing, and managing exposure. The collaboration not only opens up new revenue streams but also makes the claims process more efficient. A few prime examples of this shift towards embedded insurance include: 

    • Uber partnered with Cover Genius to insure its drivers in Brazil.
    • Ola teamed up with Alliance Insurance Brokers to provide personal accident coverage for drivers on duty.
    • Klook extended its partnership with AXA to launch a rental car insurance plan. 

Airlines, squeezed by slim profit margins, are enabling embedded insurance offerings, covering stuff like trip cancellations, flight delays, lost baggage, and medical emergencies, as new ways to make money. How? By slipping insurance right into the booking process. It’s a sweet deal for travellers – easy to buy, fits what they need, and less worry for unforeseen cancellation scenarios. For the airlines, it’s a sweet spot, too. Better customer experience, additional revenue stream, meaningful data insights, and better risk management. It’s a solid win-win! 

    • SKY Airline and Spirit Airlines collaborated with Cover Genius to offer travel protection to their customers.
    • Korean Air teamed up with Chubb to provide domestic and overseas travel insurance. 

Digital Banks’ Bold Move into Insurance

In 2023, the collaboration between digital banks and insurtech firms surged in a bid to provide embedded insurance solutions to customers. This strategic alignment capitalises on the strengths of digital banks in terms of efficiency, user experience, and technological innovation, complemented by the specialised expertise of insurtechs.

    • Monzo and Qonto partnered with Qover to provide various levels of travel, fraud, and purchase protection to their customers. 
    • Revolut joined forces with AIG to launch car insurance in Ireland
    • Lydia collaborated with Qover to offer travel insurance to premium cardholders. 

In 2023, Cover Genius and Qover, two insurtechs, grabbed attention by establishing pivotal partnerships with a diverse array of influential players. Cover forged pivotal collaborations with major travel booking platforms such as EaseMyTrip, Uber, and HomeToGo, as well as with prominent airlines. On the other hand, Qover chose a different path, focusing on digital banks to extend its reach. These partnerships allowed the insurance providers to solidify their positions as key orchestrators of an interconnected ecosystem.

Embedded insurance in travel and mobility isn’t just a trend; it’s a key shift that unites insurance providers, platforms, and consumers in a cohesive ecosystem, unlocking benefits for all involved. Insurance providers are reaching customers directly at their point of need and enhancing their relevance in the digital age. Travel and mobility platforms stand to gain an edge in customer satisfaction and loyalty, offering a more holistic and stress-free experience. Consumers are perhaps the biggest winners in this scenario. Embedded insurance transforms the way they view and engage with both travel and insurance.

Authors

Senior Research Associate

Risav is a senior research associate at WhiteSight, where he spends his days navigating the complex fintech landscape and poring over market trends. When he's not decoding the world of fintech, you'll find this sports fanatic decoding the perfect curveball on the football field.

Senior Branding Associate

Kshitija is a senior branding associate at WhiteSight, crafting branding strategies and fintech content. When she's not conjuring up new ideas for the company, you can find her dabbling in new hobbies and documenting her experiences through writing and short films.

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