From Embedded to Invisible Insurance
Written by Scott Walchek July 20, 2021
Where Trov’s embedded and invisible insurance fit on the engagement continuum and how they’re enabling modern insurance distribution.
Today, we announced the second group of companies that will use Trov’s capabilities to offer insurance - embedded within their branded digital user experience. Our technology enables any company with a digital presence to easily embed insurance quoting, binding, managing, billing, and claiming into their existing native apps and websites. Insurance distribution is transforming in response to the massive flight of customers to modern, digital platforms of commerce, sharing, social engagement, and entertainment. In light of the evolving expectations of digitally-native customers, Trov is responding to - perhaps enabling - this transformation by offering solutions in the forms of both Embedded and Invisible insurance.
In May, Caribou Honig (of InsurTech Connect fame) posted a fascinating and detailed article in which he describes a continuum of user experience of insurance from Direct to Consumer, passing through ‘Embedded’ on the way to ‘Invisible’. As Trov has been immersed in the digital transformation of insurance for the past seven years, we’ve occupied a few of the waypoints along that continuum. In the article we posted last month, we describe how Trov’s true north is embedded insurance. We launched our APIs, UX libraries, documentation, and how-to guides supporting this proposition. But, as Honig’s Continuum demonstrates, Trov has developed and launched both embedded and invisible insurance applications. While subtle, the distinction between the two is crucial in defining how we provide value to our partners.
“Trov has developed and launched both embedded and invisible insurance applications, and while subtle, the distinction between the two is crucial in defining how we provide value to our partners.”
It's not new, but it works
To be clear, coverage offered in the context of a non-insurance customer journey is by no means new, and purchasing coverages at the same time as an electronic gadget, vehicle, or flight abroad is commonplace. Embedded insurance, in our application, is an opt-in experience giving the customer the choice of coverage when they can most appreciate its value.
For example, we’re presently working with one of the world's most prominent auto brands, who are extending their reach to offer all digital insurance embedded within their popular vehicle management app. In addition to standard protections, we’re developing features that enable short-term and flexible coverage to reflect a range of customer use-cases. This pairing of utility that encourages regular engagement with an offer of coverage in situ perfectly exhibits the embedded insurance proposition: personalized coverages offered in the context of a relevant, non-insurance user journey.
“This pairing of utility that encourages regular engagement with an offer of coverage in situ perfectly exhibits the embedded insurance proposition: personalized coverages offered in the context of a relevant, non-insurance user journey.”
Now you see me. Now you don't
A few years ago, after successfully launching its on-demand insurance, Waymo approached us with a question: could Trov’s insurtech be engaged by machine signal instead of human authorization? At the time, they were just beginning their commercialization journey and wanted some non-standard coverages for the autonomous trip’s made by passengers. These protections were to be built into each passenger ride, and as such, were a perk of using the novel mobility platform. Since the coverages were not offered to the rider - they were neither opt-in nor opt-out - these were invisible to the beneficiaries. This was our first encounter with invisible insurance, which was both all-inclusive and automatically activated with each new trip.
Our commercial fleet coverage platform has matured our invisible insurance proposition to provide similar coverage for passengers and fleets alike. Providing flexible duration and context-dependent protections for the likes of Hyundai’s Mocean car-share, Stellantis’ (formerly Peugeot/PSA Groupe) widely successful Free2Move car share platform, and Honda’s equipment sharing community. Each of these customers protects their drivers, passengers, and assets with invisible insurance premiums that scale with utilization and are included in the cost of the service.
In 2020, despite the lockdown’s impact on the growth trajectories of emerging mobility, our Fleet platform activated over 640,000 policies entirely invisible to their beneficiaries. Now, in 2021 we’re on track to achieve high double-digit growth in our invisible insurance offerings.
“In 2020, our Fleet platform activated over 640,000 policies entirely invisible to their beneficiaries. Now, in 2021 we’re on track to achieve high double-digit growth in our invisible insurance offerings.”
It takes two to tango
While both embedded and invisible insurance appropriately occupy different points on the Honig Continuum (™ Caribou Honig 🙂 ), the success of both rests in their dissimilarity. Embedded insurance is ideal for those situations that call for some user deliberation, which generally occurs when cost and complexity are higher-order components, and user opt-in/out should be a considered engagement in context. The distributor of embedded insurance solutions is motivated by offering a branded experience that affords them greater customer lifetime value, recurring revenue, and brand equity. However, in the case of invisible insurance, protections are generally passed on without the insured’s consent or interaction. The platform operator absorbs the premium and likely offsets the cost in the price of the service provided. The distributor of invisible insurance is motivated primarily by risk transfer, business continuity, and low/no-touch user engagement rather than a new revenue opportunity.
In a recent blog post, we dubbed ourselves the Embedded Insurance Company. Perhaps this was too hasty? But, “Trov, the Invisible Insurance company” just doesn’t feel right; we have far too much to accomplish to simply vanish. Semantics aside, Trov’s offers distributors solutions in either Embedded or Invisible insurance, irrespective of their use case or motivation.