"With partner companies like Consor, we can expand our offering and make our electronic signatures increasingly available to our insurance customers" says Skribble CEO Philipp Dick.
Embedded insurance refers to insurance products that are purchased in a package with a service or item. The approach is not new: for example, a landlord on Airbnb automatically receives liability insurance that covers him against damage or theft of guests’ property, among other things. A well-known example is also cell phone insurance, e.g. that of Swisscom: When buying a new device in a Swisscom store, it can be optionally insured against various property damages.
In contrast to conventional insurance, embedded solutions cannot be taken out separately from the service or the object. In some cases, the customer is not even aware of the insurance coverage – at least until a claim is made, as in the case of the Airbnb coverage mentioned above. In terms of insurance, embedded products are usually represented by collective contracts. The insurance partner, in the above examples Airbnb or Swisscom, is the policyholder. Insured persons, i.e. the landlord or the cell phone owner, then join the collective contract.
Insurance companies are expecting a lot of growth from embedded solutions, not least through the use of the partners’ new sales channels. Accordingly, many are developing new offerings together with partners and testing them out on the market.
Due to various peculiarities of embedded products, some challenges arise in their implementation and operational handling, which particularly affect IT. At the core is a “balancing act” between individualization and standardization that must be mastered: the contract between the insurance company and the policyholder (the partner) must be able to map the individual needs of the partner, but the conditions, benefits and premiums for the insured persons are highly standardized within the contract.
At least initially, a high degree of flexibility is required in the definition and roll-out of the products. The partners want to be able to quickly integrate new solutions and, based on market experience, also make adjustments and enhancements together with the insurers.
In addition, it must be possible to map a wide variety of products in different sectors; depending on the partner and the nature of its offering, the needs differ significantly. Does the insured person receive the premium invoice or does the invoice run summarily via the partner, who then also passes it on, depending on the product? Are the products bound to a fixed term or are they renewed on a recurring basis? Are they billed once, monthly or annually?
The interface from the partner to the insurer must also be provided. After all, the partner is in the lead when new insured persons join and usually also when individual insured persons are adjusted or when they leave the company. How does the insurer receive the corresponding entries and changes? This is often done manually via spreadsheets, i.e. the partner sends the insurer, for example, a monthly Excel with all new entries. In return, the insurer creates a statement based on this data, also manually. To operate such a manual interface is inefficient, error-prone and unattractive for the involved clerks. In addition, the data cannot be evaluated or can only be evaluated with difficulty, which means that further business potential is wasted.
This is a pity and avoidable, as we will show in the following.
Digital implementation with the object management tool of Consor Universal
The object management tool is a proven module of Consor Universal. Originally developed for large property insurance contracts, our customers are increasingly using it for embedded insurance policies to better and more efficiently serve their cooperation partners. We have also extended the module specifically for embedded insurance.
The contract with the partner is created and released as a regular business transaction with the usual flexibility of Consor Universal. However, the insured persons are outsourced to the object management. When a new person joins, the rules defined in the business transaction, such as those for pricing or joining requirements, are inherited and applied to the person. For example, the person’s premium can be calculated or an entry can be rejected because the prerequisites are not met.
Object management is seamlessly integrated into Consor Universal. Both the business transactions and the objects are fully modelable: business users define the entire business logic, the data structures, the output and also the user interface by means of Consor Universal’s design engine. In this way, data that varies by product and industry (e.g. personal details, addresses, premiums, insurance sums, cell phone model details, etc.) can be kept in the object management.
The objects are managed historically. They can be manipulated in 3 different ways:
- Manually via the Consor Universal user interface.
- From peripheral systems via the API. Partner applications can report accessions, adaptations and withdrawals directly and online. Reporting via file with subsequent batch processing is also supported.
- Via the upload of an Excel file with the corresponding changes.
Last but not least, the contracts can also be billed via Consor Universal’s inventory management.
Embedded Insurance offers insurance companies many exciting opportunities. However, with the increasing maturity and volume, it is important to integrate the cooperation partners quickly and digitally. Insurance companies must also ensure that they can efficiently maintain and bill their offers. With object management, Consor Universal offers an ideal solution for this.
Would you like to learn more? Then get in touch with us.