The amount of uninsured losses (the amount of losses that could have been compensated if insurance had been purchased) exceeds 7 trillion dollars worldwide, equivalent to 7.8% of GDP. The protection gap is larger in emerging countries, due to factors such as low awareness of insurance and the inability to afford insurance premiums.
Because EI (Embedded Insurance) is sold via brands, product purchases and service contracts in the customer journey become opportunities for enrollment, allowing anyone to consider insurance at the optimal time. Early EI 1.0 tended to be one-size-fits-all (single) microinsurance in order to incorporate it comfortably into product prices, which meant that insurance premiums were high for low-risk customers and insurance providers struggled to make a profit.
Rather than secretly enrolling in insurance at the time of purchase, EI 2.0 emphasizes the presence of insurance and demonstrates its value by personalizing (expanding and customizing options) high-priced insurance such as auto insurance and life insurance. Customers can enroll in insurance that is optimized for them, rather than a one-size-fits-all policy, and brands can improve their CLTV by having customers continue to use their products and services.
Going forward, EI 2.0 will need to be further refined and refined into a business model that can cross the chasm by raising industry-specific success stories and brand and customer awareness. The effectiveness of GenAI will be verified through repeated proof-of-concept experiments, including the detection of fraudulent insurance claims, personalization of insurance products to meet customer needs, and automated responses by AI agents.
In the future, EI 2.0 has the potential to become one of the growth drivers for all companies and brands.
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