June 16, 2022
What: Commoditization is a huge problem for both insurance and the banking industry. How does one take an offering that is primarily the same as everything else out there and differentiate in the marketplace? Banks are starting to turn to insurtech and embedded insurance as key differentiators, turning what is commonly seen as a commodity into a full-fledged service.
Why it matters: Embedded insurance is a growing sector of the market because of its inherent improvements to the insurance buying process. In most cases, the data needed to get a quote is already present, making the intake process quick and easy. Using the trusted name of the financial institution during the insurance application process mitigates the need to re-establish trust with the customer.
What: Ally Financial has partnered with Marsh to introduce a new tool that lets users compare auto insurance quotes, featuring quoting from Progressive, Travelers, Safeco, and Bristol West. Progressive appears to be the only fully-integrated option that can be purchased through the tool, with the other carriers pushing the purchase process to a company portal or phone.
Why it matters: This is an example of a financial company including embedded insurance as a new revenue stream with added value to their customers. The tool is still in its early days, but there is clear evidence that the industry is moving past quotes and towards binding and issuance, which is a whole new work effort in API development.
What: Founded in 2017, Branch offers bundled home and auto insurance, and claims to be the only insurance company that can bind insurance through an API. They are also partnering with mortgage and security system providers to embed insurance into the purchase process.
Quote: “What attracted us at the outset hasn’t changed — Branch is one of the first companies to offer embedded home and auto insurance, and delivers massive savings for its members,” said Ian Sigalow, co-founder and managing partner at early and repeat Branch investor Greycroft.
Why it matters: Embedded insurance and binding through APIs are the key drivers of Branch’s high valuation. It is good market validation of the tech capabilities that the Dais platform can give to any carrier, no-code required.
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