Data shows consumers are more compelled by contextual and convenient insurance & warranty offerings from their banks
London, July 28, 2021 — A recent survey of 527 bank customers in the United Kingdom from Momentive.ai (the research company of SurveyMonkey), commissioned by Cover Genius, sought to understand how customers of banks, neobanks and other fintech apps would react to embedded insurance offers based on real time transaction data. It asked the following:
Suppose your bank, with your permission, monitored your transactions and offered a prompt for purchasing protection products based on your purchase history inside of your banking app. Please indicate how interested you would be in allowing them to make these offers.
The findings show that 71% of British digital bank customers would be highly interested in receiving embedded insurance offers based on their transaction data, as would 64% of traditional bank customers. ‘Convenience’ is the primary driver for their interest, stated by 49%.
“The past 15 months has accelerated the volume of digital activity, alongside a massive growth in attach rates for protection products”, said Daniel Poole, Head of Strategic Partnerships EMEA for Cover Genius. “Banks, neobanks and financial institutions have an opportunity to better serve their customers with embedded offers by adding value to major purchases with a tailored, convenient insurance offer”.
The research mirrors surveys of 3,551 Americans commissioned by Cover Genius published last month, and 11 other countries, which similarly examined 14 life events or activities or major purchases that lead to insurance consideration, such as childbirth, purchases of car, property, pets and expensive items, contracting for a wage and becoming a lessee or landlord. Across the globe, the data points to significant demand for timely and relevant transaction-based insurance offers, with dramatically higher preferences if they’ve recently had major purchases or life events, or if they used a traditional insurer in the last 12 months, or if they purchased insurance from their bank. The authors note the significant gap between an insurtech approach and the “bancassurance” reality, where traditional banks partner with traditional insurers for offerings that are typically divorced from underlying activities.
The survey of British customers also confirms that there’s broad support for bank-embedded offers for property insurance such as Renters, Homeowners and/or Landlords (43% of respondents are highly interested), travel insurance (28%), auto insurance (26%) and a range of warranties for high value personal and household items (43%).
The role and nature of traditional insurers as a “second step” in the buying process is also examined in the paper. Digital bankers and younger demographics are more likely to purchase insurance, however the data also points to a healthy future for banks as insurance distributors: 80% of Britons who chose a traditional insurer or broker in the last 12 months would prefer bank-embedded offers for next time.
While recent experience purchasing insurance is one way to identify early adopters, another is identifying users of popular fintech apps. The breakthrough findingsshow that 75% of customers who use mobile wallets, 89% of buy now pay later loan users and 79% of investing account/app users are highly interested in receiving insurance offers. Interest is also high for small business operators (89%).
“The clamour for seamless servicing has meant we’ve added partners like Wayfair and eBay in retail, several airlines and online travel agents such as Booking Holdings and Icelandair, auto, gig economy and mobility companies like National Express, Intuit and other fintechs and more”, Daniel Poole adds.
Download the full report, “Embedded Insurance – Leveraging Transaction Data To Expand Coverage In A Digital-First Market”, or the report for the United Kingdom..