'Massive opportunity' for embedded property insurance

There is keen interest among landlords, homeowners and renters for embedded insurance offerings that is currently going unmet, according to newly published research.

Insurtech Cover Genius commissioned Momentive AI to survey more than 15,000 homeowners, landlords and tenants in 16 different countries to gauge their opinion on embedded insurance, which is where insurance products are offered natively using APIs on big-brand channels and platforms.

The research shows that the majority of customers “highly intend” to switch to embedded sources of insurance in future. Cover Genius reports a potential 36% uplift, with convenience the primary driving factor across the property sector. But most consumers are not currently offered embedded insurance products; indeed, two thirds (67%) of homeowners, renters and landlords were not offered embedded insurance as part of their last application process.

When it comes to short-term lettings, 98% of hosts want short-term letting sites like Airbnb and Booking.com to offer embedded insurance as part of their checkout flow. Among the report’s other findings, customers are more likely to report a negative NPS when the claims experience is conducted through either email (-10) or on paper (-13), compared to phone (-1) or online forms (+4). And those negative experiences are having a knock-on effect: customers who have recently made a claim are found to be 16% more likely to switch insurance provider than those who have not.

Customers ‘demand better end-to-end experiences’

The findings demonstrate a clear appetite among consumers for embedded insurance products as part of the homebuying or property rental process – but show that lenders, financial institutions and accommodation providers are slow to take up the mantle.

Angus McDonald, CEO and co-founder of Cover Genius, says: “Customers are demanding a better end-to-end experience when renting and buying properties. By leveraging embedded insurance, digital companies can streamline the historically fragmented property insurance processes with digitised protection for the entire home lifecycle, from building to owning to renting.

“This new research displays a massive opportunity for digital companies – whether you're a short-term rental provider, bank, lender or proptech – to deliver a tech-led solution their customers are asking for.”

Last month, New York-headquartered Cover Genius raised US$70mn in an oversubscribed Series D funding round led by Dawn Capital to accelerate the transition towards an embedded future.