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High-speed embedded sales for a sluggish industry

How Embedded Insurance is helping to change insurers' business models

"With Embedded Insurance concepts becoming more established, the entire insurance market will see more expansion," says Stephan Roth, Chief Product Owner in IKOR’s SAP and insurance division. "As a platform provider, we need to think about whether today’s customers will also be tomorrow’s customers in this segment."

Five representatives from the tech industry and risk carriers discuss Embedded Insurance

During the roundtable discussion on Embedded Insurance, the participants looked at the digitalization of insurance sales and the connection of product offerings to platforms and ecosystems on the Internet. This is how roundtable moderator Christian Raum, Editor-in-Chief of Sapport Magazine, described it in his recap.

It is important to separate this discussion into two technical considerations – firstly, product design and sales, according to the participants Stephan Roth (IKOR), Bastian Knutzen (EMIL Group), René Schönauer (Guidewire), Achim Schweizer (Climatica Insurance Solutions), Toni Tomic (at the time of the discussion SAP, now EY) and moderator Christian Raum (Sapport Magazin).

Secondly, the integration of embedded concepts into the existing IT world. The participants also discussed fundamental questions including: "How are business models and the self-perception of insurance companies changing in a digitalized world?" Raum summed it up.

When people talk about Embedded Insurance today, they primarily think of business with insurance companies. "If I look a little further into the future, there will be other players," says Roth. "These will be online retailers, platform operators and software providers. Manufacturers of all kinds of products that want to offer their customers added value with insurance will also enter this space. I see the automotive industry leading the way."

Platform providers on the way to a real-time market for "Embedded"

Each of these providers will take on their own specific role in this new market. "Platform providers will become increasingly important in the future. This is because the platforms connect network insurance companies with manufacturers, service providers and end customers."

Obviously, the challenge here lies in the technology. "What is the technical solution for making these services available on these platforms?" Roth emphasizes. "The next question is which business cases and strategies will result from the integration. And how will the market and offering change from the end customer's perspective?" From his assessment, the market in this segment is changing into an extremely fast real-time market that demands completely new, specially designed offerings.

It's all about reducing complexity. That's why insurers should design products in such a way that they can offer them easily online with a few mouse clicks. Customers desire to select products easily, while insurers want the ability to put together product permutations in a few risk-hedged variants from different sources in the back end."

Embedded Insurance could also mean "make and buy"

Providers are discussing how to tailor their offerings and decide on which platforms to offer these new products. Whether 'make or buy' or even 'make and buy' - these strategic questions determine whether insurers should set up their own marketplace or an ecosystem. It may even make sense to have both infrastructures in parallel."

It could be beneficial to find and partner with a major player leveraging their experience.

"It is important to analyze whether there are potential partners who are interested in Embedded Insurance and with whom the company can link up in order to jointly develop offers.


Read the full summary of the roundtable penned by Sapport editor-in-chief Christian Raum in German, here.

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