Digital bank customers opt for embedded homeowners' insurance
A recent survey commissioned by Cover Genius, the global insurance technology, company found that bank customers are open to insurance offerings from their financial institutions but they’re also keen for the chance to deepen their relationship with them.
A recent survey of 538 bank customers found that 70 percent of digital bank customers and 54 percent of traditional banking customers are highly interested in receiving bank-embedded insurance offers based on their transaction data.
Convenience is the primary driver for their interest, stated by 55 percent.
In the same study, close to half of the digital bank customers said they would be highly interested in bank-embedded homeowners insurance offers, 76 percent would be interested in embedded travel insurance offers and 59 percent would be interested in both embedded health and life insurance products. Interestingly, a majority of those who used traditional insurers in the last 12 months are also highly interested in bank-embedded insurance.
“The past two years have seen a greater acceleration of digitisation than the previous twenty,” said Angus McDonald, co-founder, and chief executive of Cover Genius. “Banks, neobanks, and financial institutions are uniquely positioned to offer their customers hyper-relevant, transaction-based embedded insurance, and add value to the most important purchases their customers make, due to their long history and high level of trust with consumers.”
The research mirrors surveys of 3351 Americans published last month by the firm and 12 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.
Insurtech versus bancassurance
The report’s 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 Australian customers also confirms broad support for bank-embedded offers for property insurance such as renters, homeowners and/or landlords (33 percent), travel insurance (22 percent), auto insurance (22 percent), and a range of warranties for high value personal and household items (29 percent).
The report found that 67 percent of Australians 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 fintech apps. The report found that 73 percent of customers who use mobile wallets, 77 percent of buy-now-pay-later users, 89 percent of investing account users, and 78 percent of accounting software users are highly interested in receiving insurance offers. Interest is also high for small business operators (71 percent).
“The clamour for seamless servicing has meant we’ve added partners like eBay in retail, several airlines and online travel agents, auto, gig economy and mobility companies like Ola, other fintechs like Intuit, and more,” McDonald added.