- Strong consumer demand accelerating adoption of digital
insurance offerings globally, with Latin
America and Asia leading
the pack and gaining momentum in Europe
- Banks and fintechs are bullish on embedded insurance:
majority expect offerings to comprise 10% or more of revenue in
just three years
LONDON, Aug. 16, 2023 /PRNewswire/ -- A new survey from
Chubb, the world's largest publicly traded property and casualty
insurance company, reveals that a majority (56%) of financial
executives involved in insurance decision-making globally expect to
generate more than 10% of their revenue from embedded insurance
within three years. Today, just 11% of firms in Europe report that level of revenue, compared
to 20% globally, but 62% say their customers are interested in
obtaining embedded insurance.
Digital insurance embedded in websites and apps is becoming a
must-have rather than a nice-to-have offering, according to 81% of
financial executives globally, and 77% in Europe. This sets the stage for accelerating
adoption of insurance products in financial services
platforms. The trend is most pronounced in emerging markets
in Latin America and Asia, with booming consumer interest in
Europe.
"Banks and the Digital Wallet Race - The Embedded Insurance
Strategy," a global survey of 2,000 consumers and 200 finance
leaders conducted during the second quarter 2023, reveals the rapid
adoption and investment by banks and fintechs in embedded insurance
to meet blossoming consumer demand. Over half of consumers
globally are interested in purchasing more insurance and in
Europe, 42% believe that digital
is the obvious way to buy it.
"The race to win a greater share of consumer digital wallets is
intensifying – banks and fintechs are advancing with expanded
offerings of insurance products to deepen customer relationships,
drive growth and narrow the protection gaps of their customers,"
said Sean Ringsted, Chubb's Chief
Digital Business Officer. "Digitized insurance is already widely
popular with global consumers, and financial service providers are
building trust and loyalty while unlocking new avenues for growth
by offering customers simple, relevant and affordable insurance
protection options embedded in their digital customer journey. As
highlighted in the report, this is a global phenomenon, with
companies in Asia and Latin America investing heavily in these
digital insurance capabilities. Banks and fintechs in North America are in the race too, but not yet
at the pace of their counterparts in other regions."
Booming Consumer Demand, Led by Emerging Markets
According to Chubb's survey, consumers are responding to a
growing landscape of risk exposure with booming demand for
insurance. Overall, 56% of consumers globally believe they are
underinsured, including more than half (51%) of those surveyed in
Europe. These figures are more
pronounced in certain markets: Sixty-two percent of consumers in
Latin American and 60% in Asia
express interest in purchasing more insurance that not only
protects their "stuff," but also their lifestyle.
Opportunity for Established Firms
Established banks and insurers have a unique opportunity to
leverage these trends, especially in developed markets in
Europe, all while structuring the
insurance offers in compliance with applicable insurance laws and
regulations. Over 60% of consumers in the region expressed
high levels of trust purchasing insurance from established banks,
and 63% indicated the same for established insurers. This compares
with nearly 40% expressing high levels of trust in insurance
purchases with digital-only insurers and 31% with digital-only
banks. Globally, fifty-five percent of financial executives agree
that established insurers have an edge over digitally native
insurtechs because they have consumers' trust.
"Markets in Asia and
Latin America already demonstrate
the massive growth opportunity for banks and fintechs with embedded
insurance," said Gabriel Lazaro,
Head of Digital, Chubb Overseas General Insurance. "Consumers view
legacy banks and insurers as the benchmark in this space, and as a
result, we have seen our network of digital distribution partners
around the world continue to scale. Global consumer demand is
massive for embedded insurance, and we believe the next stage of
expansion will come in developed regions and from established
financial institutions."
"Across the European region, established banks and fintechs are
looking at embedded insurance as an opportunity to not only drive
revenue, but to build customer satisfaction and 'stickiness,'" said
Israel Rayan, Senior Vice President
of Consumer Distribution for Europe, the Middle
East and Africa (EMEA) for
Chubb. "With a growing consumer appetite for buying insurance
digitally, the embedded insurance market in Europe is quickly gaining momentum and is a
growth avenue for the banking sector."
Survey Methodology
The results presented are based on a survey conducted by
iResearch Services, a leading global provider of first-party
consumer and professional data. The online survey was fielded
during the second quarter of 2023 and results are based on
completed surveys by 2,000 consumers and 200 financial
executives.
Respondents represented all age groups, levels of education, and
professional status. Consumers were evenly split among four
regions: North America (500),
Latin America (500), Asia Pacific (500) and Europe (500).
Financial executives represented established banking
organizations (52%) and fintechs (48%). They were also evenly split
among four regions: North America
(50), Latin America (50),
Asia Pacific (50), and
Europe (50). The majority of
fintechs (84%) had revenues of $10
million to $500 million; the
majority of established banking organizations (89%) had AUM (Assets
Under Management) of at least $1
billion. All executives are engaged in decision-making about
insurance products, such as embedded insurance.
For both consumers and financial executives, the regions
included the following countries: North
America: U.S. and Canada;
Latin America: Brazil, Mexico, and Chile; Asia
Pacific: South Korea,
Singapore, Thailand, The
Philippines, and Vietnam;
Europe: United Kingdom, France, and Spain.
About Chubb
Chubb is the world's largest publicly traded property and
casualty insurance company. With operations in 54 countries and
territories, Chubb provides commercial and personal property and
casualty insurance, personal accident and supplemental health
insurance, reinsurance and life insurance to a diverse group of
clients. As an underwriting company, we assess, assume and manage
risk with insight and discipline. We service and pay our claims
fairly and promptly. The company is also defined by its extensive
product and service offerings, broad distribution capabilities,
exceptional financial strength and local operations globally.
Parent company Chubb Limited is listed on the New York Stock
Exchange (NYSE: CB) and is a component of the S&P 500 index.
Chubb maintains executive offices in Zurich, New
York, London, Paris and other locations, and employs
approximately 40,000 people worldwide. Additional information can
be found at: www.chubb.com.
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