The Big Aha From InsureTech Connect

Embedded insurance showed up almost everywhere, as executives talked about building APIs to connect seamlessly with partners.


The theme from last week's InsureTech Connect in Las Vegas crystallized for me when an insurtech executive, sipping on a glass of wine, told me he thought bartenders would make the best insurance agents. 

Think about it for a second. Even leaving aside that people tend to let their guards down after they've had a couple of drinks, bartenders know a lot about the wants and needs of their regular customers. Bartenders also have lots of leeway to offer advice. It tends to be along the lines of "Dump the guy" or "Don't dump the guy," or "Quit the job" or "Don't quit the job," but why couldn't the advice go further? 

Imagine a bartender saying, "You know, a lot of people these days don't carry any personal life insurance or don't carry enough to support their families if they get run over by a truck. Life insurance for somebody your age is a lot cheaper than you think...."

While the idea of bartender-agents is fanciful, the notion brought home to me what I saw as the theme of ITC: embedded insurance. 

That theme showed up throughout the conference, where almost every executive I met with talked about how their company was building application programming interfaces (APIs) to connect seamlessly with partners. Many executives cited examples of embedding insurance offerings in the sales of other products -- offering insurance for an engagement ring while the couple is still at the jeweler's, offering specialized auto insurance that can be purchased with just four taps on a phone when a driver signs on with a ride-sharing company in the U.K., etc. An executive from Credit Karma told me about how the company is using its relationships with its more than 100 million members in the U.S. to engage them about insurance.

While I was at the conference, Next Insurance and Intuit underscored the embedded theme by announcing that small businesses and accountants would be able to buy numerous insurance products without ever leaving the QuickBooks ecosystem, in which they spend so much time thinking about financial considerations. This follows Next's announcement with Amazon a year ago, where Amazon is offering product liability insurance to the massive number of small businesses that sell products through it. (I continue to think that relationship could spread and have a major effect on insurance, as I wrote here.)

The recent examples build on others that have drawn attention in the past couple of years, such as the ability to sell renter's insurance as part of the process of renting the apartment, the increased availability of warranties when someone buys a phone or other expensive device and, of course, the continued success of Exhibit A for embedded insurance: travel insurance. 

It seems to me that one of the shibboleths of the insurance industry is being turned on its head. We've all been told that insurance is sold, not bought. Increasingly, though, insurance will be bought, not sold -- at least if companies can position themselves in the middle of the purchase of something that triggers a thought about the need for insurance.



P.S. If you'd like to read more about embedded insurance, I'd recommend these articles that we've published over the past year or so:

Embedded Insurance: The Hot New Topic

Embedded Insurance Reaches Tipping Point

The Recipe for Embedded Insurance

Embedded Insurance -- Both Old and New