What Is Embedded Insurance? (Plus: How It Works)

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By The Boost Team on Apr 11, 2022

5 min read

A young woman wearing a sweatshirt sits on the floor next to a chair. She is holding a credit card in one hand and typing on her phone in the other hand.

Embedded insurance growing in popularity and interest in the digital insurance space and is a huge revenue growth opportunity. However, for businesses outside of the insurance industry, it’s not always clear what embedded insurance actually means. We’ll go over what embedded insurance is, how it works, and why it matters for your business.

Embedded Insurance Definition

“Embedded insurance” gets its name from being embedded into an existing purchasing experience, allowing customers to buy digital insurance without requiring them to go elsewhere to complete the transaction.

This is part of a growing trend of “embedded finance,” wherein customers are able to buy, sell, access credit, and interact with their bank through the platforms of non-financial companies. If you’ve ever ordered something from an app and paid for it without leaving the app experience, you’ve used embedded finance.

How Does Embedded Insurance Work?

Embedded insurance has a similar function and addresses many of the inconveniences that a consumer might face in a more traditional insurance-buying process. Typically, buying traditional insurance includes numerous disjointed, repetitive steps, such as navigating multiple websites, submitting documents multiple times, and even offline components, like calling an agent or faxing in forms.

In contrast, embedded insurance is available to buy when and where the customer needs it - usually when they’re making a related purchase. Rather than having to bounce between separate providers or experiences, embedded insurance allows customers to easily provide their information, get a quote, and receive their policy right from the website or app of the business they’re already transacting with. This ultimately makes the digital insurance purchase process easier for both the business and the customer.

Embedded Insurance Examples in the Real World

If you’ve ever bought a plane ticket online, you have probably been offered a protection plan or travel insurance policy as part of the checkout process. That's an example of a real-life embedded insurance product. Without leaving the airline’s purchase flow, you can buy insurance as part of the same transaction as your tickets. By simply checking a box, the price is added to your total cost, your trip is protected, and you’re sent an email with details on how to file a claim. That’s the convenience of embedded insurance for consumers.

Travel insurance is a common example that many people have encountered in their daily lives, but embedded insurance is actually on the rise across a variety of industries, including both B2B and B2C. Regardless of the type of business offering embedded insurance, the process is very similar: the customer is offered a way to seamlessly buy the insurance, at a time they’re likely to be interested.

Here’s another example, for a very different business type.

Let’s say John owns a certain amount of cryptocurrency, which he stores in a digital wallet on an exchange. With crypto theft increasing and few protection options available for the average consumer, John is rightfully concerned about the safety of his digital crypto wallet. One day, while John is checking his balance on the exchange website, he gets a pop-up notification about new crypto insurance coverage. He clicks on the pop-up and is taken to a product page within the same exchange website. He fills out a form, makes his first premium payment, and goes back to checking crypto prices.

The whole process takes him less than ten minutes, and now John’s crypto wallet is protected with the coverage that he needs in case of a breach. Meanwhile, the exchange has collected John’s customer data, set up recurring payments, and built a deeper customer relationship.

Why Embedded Insurance Works

If you’re looking for ways to increase your revenue and/or deepen your customer relationships, offering embedded insurance as a complement to your existing products or services is a great business opportunity. You may not be selling plane tickets or crypto, but chances are you’re offering something that could be protected by insurance.

If your company caters to pet owners, you could offer white-label pet insurance, and help your customers protect their pets’ health when they’re already making a pet-related purchase. If you manage a cryptocurrency exchange platform, you could offer crypto wallet insurance to help your retail clients enhance the safety of their digital assets. If you provide HR services to SMEs, you could offer parental leave insurance to help your clients affordably offer this highly desirable benefit, while you’re already helping your clients set up their benefits packages. The options are plentiful.

The greatest advantage that embedded insurance offers to your customers is convenience—they can easily get the protection they need for just a slight extra cost, and no extra effort.

The greatest advantage that embedded insurance offers to you is that it works to grow your revenue. By offering your customers a quick, easy, and beneficial product, you can tap into a new stream of revenue. And, by applying your knowledge of your customers’ needs and purchasing behaviors, you can get ahead of their concerns, offer them a valuable solution, and ultimately, increase their brand loyalty.

What Is White-Labeling for Insurance?

While there are multiple ways to approach embedded insurance, the fast and most cost-effective approach is usually white-labeling insurance products.

The concept of “white-labeling” is not unique to embedded insurance. A white-label product is a product or service that is manufactured by one company and then rebranded and sold by other companies.

For example, when you see food items sold with the Trader Joe’s logo on them, those products were most likely not produced by Trader Joe’s. They were white-labeled and then sold under the Trader Joe’s brand.

The reason for white labeling is that it saves the company a lot of work. Instead of Trader Joe’s having to produce every frozen spring roll themselves, own vineyards to source each bottle of wine, and employ all the people involved in manufacturing each product, they outsource that work to companies that specialize in producing those things, then white-label and sell the products that those other companies create for them.

With white-label insurance, the same idea applies. It’s theoretically possible for a company to build its own insurance product, but in most cases, it makes more sense to outsource that labor. Developing an insurance product is a complicated, expensive, and lengthy process with different legal requirements in each state. Instead of trying to take that on yourself, you could work with a company like Boost, who’s already done that work for you.

If you want to learn more about growing your revenue with white-labeled, embedded insurance through Boost, contact us, or dive into building your insurance program with Boost Launchpad.

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The top 3 takeaways from our embedded insurance consumer survey

Embedded Insurance Survey Results: What We Learned From Consumers

Feb 3, 2023

You may have heard that embedded insurance is a big opportunity to grow your business, but are your customers actually interested? We wanted to get the story straight from the source, and so in Q4 2022 Boost surveyed 650+ US consumers. We asked about their experiences with insurance, how they felt about their current insurance options, and what mattered most in their insurance purchases. Here are the top 3 things that we learned from our consumer insurance survey results. [See Full Size] In our insurance survey, a whopping 73% of consumers had either already bought insurance from a non-insurance brand, or would be interested in doing so. While price was mentioned most often, other reasons included brand loyalty and convenience. Trust was another important factor. 62% of respondents were interested in buying financial products from a trusted brand, rather than a bank. For millennials, the number went up to 95%. First movers might have an advantage here as well. 20% of our respondents had never been offered financial products from a retail brand - but they liked the idea. All this is promising news for companies outside the traditional insurance sphere who are looking to build revenue and customer loyalty with embedded insurance. If you can deliver the product and experience consumers are looking for, the appetite is there. It’s hardly a secret that convenience is crucial to customer experience in the digital age, so it comes as no surprise that it was important to our respondents. 59% told us that they’d be more likely to buy insurance if it were offered digitally, as part of a related transaction. Younger consumers were more likely to be enthusiastic about digital insurance: nearly 70% of respondents aged 18-29 were interested in buying insurance directly through a transaction on a retail website. For half of our respondents, embedded insurance wasn’t a novel idea. 50% had already bought embedded insurance at least once, at the point of sale in a related transaction. For many consumers, insurance is a long-term purchase. 68% of our survey respondents told us they’d had the same insurance provider for at least two years, and 10% had had the same provider for more than five years. For retailers, insurance could also be an overall boost to retention. 62% of respondents said that when a retailer offered protect-your-purchase options, they were more likely to be repeat customers. Learn more about offering embedded insurance in our free guide, or contact us to get started.

Get the Guide: Growing Your Revenue with Embedded Pet Insurance

Jan 12, 2022

It’s a great time to get into the pet insurance market. In fact, more than 70% of American households now own at least one pet, and with the rising cost of vet care, those households are more and more likely to insure their pets’ health. For businesses that serve pet owners, offering embedded insurance is a significant opportunity to grow their revenue and deepen relationships with their customers. At the same time, for most pet-related companies, insurance is a whole new line of business outside their core expertise. The opportunity is there, but it can be hard to know how to get started in the pet insurance market. Partnering with Boost can make it easy to get underway! Download The 2022 Guide to Growing Your Revenue with Embedded Pet Insurance, and learn everything you need to know to get your business started with pet health insurance: Learn how pet health insurance works and what coverages are most commonly available, and explore the use cases that make pet insurance valuable to your customers. Learn which types of businesses have the best opportunity for offering white-label pet insurance, along with what it takes to actually get started (spoiler: less time than you’d think). Learn how to reach your customers with your new insurance offering, using the knowledge you already have about their preferences and buying habits for their pets. The 2022 Guide to Growing Your Revenue with Embedded Pet Insurance is free to download HERE. And as always, if you have any questions about our pet health insurance product or anything else, our team is here to help.

Introducing The New Boost Brand

Nov 9, 2022

It’s an exciting day for Boost: today we’re officially launching our new brand identity, and a shiny new website to go along with it. When we started Boost in 2017, we had one big goal: to drive innovation in the insurance industry. The insurance market is highly regulated, inefficient, technologically underdeveloped and traditionally dominated by a handful of large players, who haven’t had much incentive to change with the times. This added up to an environment that made it very difficult for new players to get modern ideas to get off the ground - which is why buying insurance was still a painful, largely offline process, with often-outdated products. We built Boost to change that. Our mission is to make the insurance industry accessible to innovators by providing the compliance, capital, and technology infrastructure they need to offer modern protection to their customers. We wanted to make it easier for new players to get to market, and to make insurance work better for everyone - the people buying it, and the people offering it. Five years later, it’s been a wild ride. We’ve built an API-based platform that enables any company to offer branded, digital insurance through their website or app, powered by one of the most advanced policy administration systems in the industry. We’ve launched a suite of first-of-their-kind insurance products like parental leave insurance, crypto wallet insurance, and management liability insurance designed for startups, as well as launching improved, more customer-centric versions of established products like business owners insurance for small businesses, cyber insurance and pet health insurance. Since Boost’s inception, we’ve powered more than 40 insurance innovators as they’ve improved the insurance buying process. I couldn’t be more proud of what we’ve accomplished. But we’re nowhere close to finished. Boost’s overall vision for the insurance industry is much bigger than where we are today: we’re building the insurance market for the modern world. Our vision is to democratize the industry through technology and innovation so everyone can have access to the protection they need, when they need it. To tackle that vision, we’ve grown a lot as a company - and it’s time for our brand to grow, too. The updated Boost brand better reflects who we are now: a bold, modern, tech-forward leader in the insurance space. It allows us to tell our story in a way that’s easier to understand, and gives us room to scale as we continue moving forward. The central element in our new brand identity is one you’ll hear us talk about often - the idea of the platform. Boost delivers more than just robust tech infrastructure, white-labeled insurance products or access to risk capital through our managed reinsurance facility (though we have those too). With Boost, you get an end-to-end platform comprising every layer of the embedded insurance value chain, all in one turnkey solution. The platform is what gives our customers the tools to scale their insurance programs and build long-term, profitable lines of business, and that’s why we made it the cornerstone of our brand. Alongside our new brand identity, we’re also excited to unveil the all-new Boost website. Our new online home isn’t just prettier to look at - it’s also packed with more information about what we offer, and more ways to connect with us. Boost has come a long way since the beginning, and I look forward to the next steps we take on our journey. Much more to come!